Director Qualification Disclosures Could Impact Proxy Season
NEW YORK, April 17, 2012 — Leaders from Deloitte’s Center for Corporate Governance offer perspective on the 2012 proxy season as increased pressure to disclose detailed director credentials spurs scrutiny of board composition. This could present a hurdle for many organizations who have not adopted robust processes for director selection and disclosure.
Shareholders and regulators alike continue to have increasing access to information on director qualifications – a development that potentially opens the board up for criticism about its composition and competencies. For public companies, having a board without the appropriate experience mix could, at a minimum, create an appearance of inadequate corporate governance and difficulty navigating challenges ahead.
As companies head into the proxy season, indications are that shareholders will be focused on these director qualification disclosures. As a result, it would be prudent to take a closer look at the board, determine its strength and opportunities for improvement, and establish a plan of action to begin to address any significant gaps. Then the company may be better-positioned to respond to inquiries in a robust, proactive manner. The board may want to consider a proactive approach to these disclosures and conduct a self-assessment. Again, this demonstrates putting the interests of the company and its stakeholders in the priority position, and underscores a commitment to corporate governance above individual interests.
For more information, please go to www.corpgov.deloitte.com to view Deloitte’s 2011 Board Practices Report, Mid-market Perspectives: Optimizing Private Company Competitiveness through Effective Board Composition and Deloitte’s point of view, Creating the Board Your Company Deserves: The Art – and Science – to Choosing Directors.
Deloitte’s U.S. Center for Corporate Governance orchestrates dialogue, knowledge-sharing, and thought leadership on governance issues to help advance collaboration among corporations, board members, the accounting profession, academia, and government. Timely, relevant, and balanced governance information is available on the Center for Corporate Governance website at www.corpgov.deloitte.com.
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