For two decades, Fenwick has reported on corporate governance statistics and trends among the S&P 100 and Silicon Valley’s top public companies (Fenwick – Bloomberg Law Silicon Valley 150 List), with the goal of educating public company executives and board members on trends as these continuously evolve.
Most of the governance practices and trends from previous years continued in the 2023 proxy season. A notable development includes the continued increase in board gender diversity in both the SV 150 and S&P 100. We also saw changes in other key areas, which are discussed in our report, including the prevalence of dual-class voting structures, board classification, majority voting and stock ownership guidelines for executive officers and directors, board leadership structure, frequency of board and board committee meetings, board and board committee size, and executive officer numbers and classification.
Select observations for 2023 include:
- The percentage of women board members for the SV 150 and S&P 100 continued its increase in 2023 with both groups showing similar levels of representation. The percentage of women serving on boards of SV 150 companies increased slightly to 33% in 2023 from 32.6% in 2022. Similarly, the percentage of women serving on boards of S&P 100 companies was 33.6%, increasing from 32.2% in 2022.
- Adoption of dual-class voting stock structures has emerged as a recent important long-term trend among Silicon Valley technology companies though it is still a minority of companies. Throughout the past decade, the SV 150 saw a sharp increase in the frequency of dual-class voting structures (from 2.9% in 2011 to 29.3% in 2023), a trend which we expect to continue. This rate continues to greatly surpass the rate of the S&P 100 (which has declined to 8% in 2023 after fluctuating between 7% and 12% since 2011).
- Classified boards remain significantly more common among technology and life sciences companies in the SV 150 than among S&P 100 companies. Their use has steadily increased in the SV 150 (from 45.9% in 2015 to 56% in the 2023 proxy season). Companies in the middle 50 and bottom 50 of the SV 150 were more likely to have classified boards than the larger SV 150 companies.
- More companies are implementing some form of majority voting among both the S&P 100 and SV 150. The increase has been particularly dramatic among S&P 100 companies, rising from 10% to 97% between the 2004 and 2023 proxy seasons. Among the technology and life sciences companies in the SV 150, the rate has risen from zero in the 2004 proxy season to 53.3% in the 2023 proxy season (though that was a slight downtick from 2022).
- SV 150 companies are more likely to separate the board chair and CEO roles than S&P 100 companies, with 46.7% and 61% having combined the roles, respectively. Between 2004 and 2023, the percentage of board chairs who are insiders has declined for both groups, though both groups have also seen small increases over the last couple of years.
Download the full report.
Also published by the Harvard Law School Forum on Corporate Governance.
