Wednesday, March 5, 2008

Silicon Valley Board trends

Spencer Stuart (the recruiting firm) publishes a Silicon Valley Board Index every year, tracking the trends of Silicon Valley boards vs. the S&P500 averages - based on an index of 100 Silicon Valley companies (the SV100). This is a helpful report to see what's changing in the valley, but also how far ahead/behind the S&P500 averages we are.

Notable changes in 2007
- boards are more independent. An average of 83% independent directors in 2007 vs. 75% in 2003; this is consistent with the S&P500 average of 81%.

- Silicon Valley boards have made little progress in the representation of women. 48% of boards in 2007 have a female director, up from 41% in 2003; this is in stark contrast to the S&P500 average of 91%. Yup, this doesn't surprise me.

- nearly all boards have a finance expert, up from 11% in 2003. This is just plain smart in today's governance and Sarbox world

- directors are spending more time on board work adding an average of one more meeting per year vs 2003, although audit committees meet an average of four times more per year than in 2003. Yup - I can really relate to this one - I am on two committees (chair of compensation and on governance) - at Rambus.

- director compensation is also increasing. The average cash retainer is now $35,600 up from $25,000 in 2003. This is in contrast to an S&P500 average of $68,600 but as Spencer Stuart says "size matters when it comes to director's retainers".

- changes from 2006 - boards in the region added 82 new independent directors, the youngest was 29, the oldest was 76 and 12 were women.

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