INSTITUTIONAL INVESTORS will be increasingly more powerful and demanding with regard to their expectations from corporations, their boards and management. Activist groups will continue to agitate for "change and reform" of corporations. The Internet will make it possible for stakeholders to communicate with each other more effectively than ever before. The same trends that most recently impacted the audit committee -- increased professionalism, accountability and credentialing -- will continue to be felt in other areas of board responsibility:
* More Accountability: Institutional investors will place more emphasis on corporate governance and require that this committee be composed of independent directors.
* Objective Monitoring of Performance: Stakeholders will require the adoption of formal governance principles and will develop templates with scorecards to objectively measure performance against the principles and will publicly publish the results.
* Non-CEO Board Candidates: The trend limiting the number of boards that CEOs serve on will force boards to look at the next level of senior management as a source for qualified board candidates. This will lead to the acceptance of more diversity candidates as board members.
* Credentialing and Literacy: The increased complexity of compensation plans will require committee members to be "compensation literate" to ensure understanding of the various programs and methods.
* CEO Compensation: Concern over the disparity between CEO compensation and other levels in the company, and continuing escalation without regard...