Directors categorized by professional background.

• Position: BOARD REPORT

Ed. Note: The Conference Board has released "Director Compensation and Board Practices: 2013 Edition." The 200-plus page report, developed and published in collaboration with Nasdaq OMX and NYSE Euronext, is designed as a benchmarking tool, with more than 150 corporate governance data points analyzed by company size (measurable by revenue and asset value) and 20 industrial sectors. The following passage and table from the report addresses the professional background of directors among the surveyed companies (359). The full report can be accessed on the Conference Board website (www.conference-board.org).

The SEC rules on corporate governance disclosure enhancement emphasize the importance of transparency on the qualifications, skills, and experiences considered in the director nomination process. The accompanying exhibit illustrates the average percentage of members of the board who belong to each professional background category.

A large majority of company boards avail themselves of the expertise of a current or former senior executive of a for-profit corporation. Board composition varies greatly across revenue and asset value groups. The correlation between company size and director background is not always easy to detect, and all groups show a certain degree of skill diversification within corporate boards. However, the percentage of CEOs, presidents, or board chairs of for-profit companies tends to increase with company size, whereas the percentage of bankers and investment management professionals diminishes sensibly.

Professional background of directors, by company size Annual Annual Annual Annual Annual...