Governance: recruiter's study finds change, and progress.

• Author: Marshall, Jeffrey
• Position: BusinessBRIEFS - Trends in boards management

Spencer Stuart, a global executive recruiting firm, says that its 20th Spencer Stuart Board Index (SSBI) study and survey of boards of directors in the S & P 500 shows three significant findings: Progress has been made on corporate governance changes mandated by the Sarbanes-Oxley Act; lead directors are now standard in boardrooms; and active CEOS/COOs are more reluctant to serve as directors.

Despite calls for more independent chairmen, less than 10 percent of all S & P 500 boards have independent chairmen. The CEO is still chairman on 71 percent of S & P 500 boards, and on 140 boards where the CEO is not chairman, 67 percent of the chairs are not independent.

On the other hand, boards have recognized the need for lead or presiding directors. Some 94 percent of all S & P 500 boards now have a lead or presiding director, compared with 85 percent last year; just 36 percent reported having this position in 2003. The increase represents the strengthening board leadership by independent directors, even if not in the chairman role.

Given the increasing time commitment required for board service and a perception by some of greater financial and reputational risk, it is becoming harder to recruit active CEOs/COOs as directors, although companies prefer them. Active CEOs, on average, now serve on less than one outside corporate board, down from two in 1998. Active CEOs/COOs account for 32 percent of new board appointments, down from 53 percent in 2000. Perhaps as a result, boards are...