2021 Inside the Public Company Boardroom

Inside the Public Company Boardroom presents a snapshot of what public company boards look like in 2021. With topics that range from proxy voting to board composition data to director skills and information about directors joining boards, this report answers public company boards’ questions about where they stand in relation to their peers. The data was compiled by both Main Data Group, a provider of executive-compensation benchmarking, and MyLogIQ, a provider of public company intelligence.

Key Findings

Growing number of directors with ESG and human capital skills: Directors with ESG and human capital skills have doubled since 2018—with both standing at six percent of all directors—as more companies are valuing directors and candidates with these in-demand skills due to increased emphasis from stakeholders in a post-COVID-19 world.

The multiyear trend toward gender parity has continued: The gender imbalance has continued to decrease year over year. This year, 87 percent of outgoing directors were men and only 63 percent of incoming directors were men. This leaves the overall gender balance in the Russell 3000 Index at roughly three men for every woman on the board. While there is still much room for progress, this stands in contrast to 2018, when fewer than one in five directors were women.

Greater gender balance in board leadership roles: Gender imbalance also saw a slight decline in board leadership roles. The board chair, lead director, and the chair of the three major committees saw an increasing number of women take on the role.  The committees seeing the greatest increase in the number of women chairs were the audit committee (almost 4% growth since 2018) and the corporate governance committee (almost 4% growth since 2018).  

Corporate governance is increasingly on the shareholder ballot: The percentage of companies in the Russell 3000 Index that had their board of directors become a target of shareholder proposals grew to nearly 62 percent in 2021, up from 46 percent in 2018, reflecting how shareholders are gaining influence in annual meetings. Forty-seven percent of all shareholder proposals in 2021 regarded directors.

Sharp increases in board oversight of ESG: Fifty-one percent of boards in 2021 disclosed in their proxy board information about their oversight of ESG/sustainability. This is a stark increase from the 34 percent who did so in 2020. However, only 8 percent of companies in the Russell 3000 Index reported board oversight of human capital. Financial services led the way with just over one in four (28 percent) companies in that sector reporting board oversight of human capital.

Decrease in board leadership turnover in 2021: Board leadership turnover was down year over year. Typically, about 21 percent of boards turnover their chair in a given year. In 2021, that number was 17 percent. This could be because boards are still meeting virtually, and the experiences of 2020 are causing boards to consider waiting before onboarding new directors.

Independent boards tend to be more gender balanced: Boards that are more independent have more women serving as directors. On boards whose membership is over 90 percent independent directors, men outnumber women three to one. On boards whose membership is less than 50 percent Independent, men outnumber women nearly six to one. This could be because opening up the director search to outside candidates increases the pool of talent, and therefore the number of women nominated.