Corporate Governance: The Board:
Board Structure
Board Composition
Position: The board should strive for a diversity of backgrounds, expertise, and perspectives, including an increased investor focus.
Rationale: Board composition with these attributes will:
- Improve the likelihood that the board will act independently of management and in the best interests of shareowners
- Reduce the influence of board members who are executive or financial officers of other companies who might have a natural inclination to support management’s perspectives
- Ensure that board members are able to understand the many complicated financial transactions and activities
- Ensure that company activities are presented properly in the financial statements
- Ensure that shareowner and investor views are considered along with the perspectives of CPAs.
Where stated: AIMR - NYSE Listing Stds; CAC - CSA CG Proposals; USAC Audit SC - Audit Oversight
Board Mandates
Position: Board members should limit the number of board memberships they accept at any one time.
Rationale: Limiting the number of board mandates provides board members with more time to adequately consider the issues affecting a company and to decide on matters in a manner that serves shareowners’ best long-term interests.
Where stated: AIMR - NYSE Listing Stds
Term of Service
Position: Board members should limit their length of service on a specific company’s board to no more than 15 years.
Rationale: This would enable new board members with fresh insights and ideas and renewed independence to be elected.
Where stated: AIMR - NYSE Listing Stds