Small boards, fewer insiders: director data.

• Position: Limited board of directors membership means corporate efficiency - Includes related article

Director Data

Corporate boards today are positioned to do a more effective job of governance than they were 10 years ago, according to a report on board trends and practices at 100 large U.S. corporations issued in December by SpencerStuart Executive Search Consultants. Boards today, says the firm's president, Thomas J. Neff, are "smaller, more independent of management, more action-focused." The report analyzes proxy data from 1990 and 1980 for 100 companies that comprise the SpencerStuart Board Index (SSBI). These companies are considered to be leaders in their respective industries and trendsetters in corporate governance. The survey highlights 10-year trends in board size, composition, and compensation to suggest what may lie ahead for chairmen and their boards. An excerpt from the survey follows.

The typical board at the start of the '90s is smaller than its predecessor of a decade ago. Among the 100 multibillion-dollar companies that comprise the SpencerStuart Board Index, the median board size is now 14 -- down from 16 at the start of the '80s. Two trends worth noting:

* Reductions have occurred most frequently at the top end of the spectrum. Ten years ago, 28 of the 100 boards had 18 or more directors. Today, only 14 boards are in that upper range. In 1980, there were seven boards with 23 to 27 directors; now the largest number of directors is 22, and only three boards are that size. During the '90s, we expect this trend -- the largest boards getting smaller -- to continue, chiefly through a continual reduction of insiders.

* Midsize SSBI boards are tending to cluster at a lower level. Ten years ago, nearly a fourth of the SSBI boards were in the 14-to-15-director range. Today, a fourth of the boards are in the 11-to-12-director range. (Only seven boards had 11 or 12 directors in 1980.)

Most of the SSBI companies -- nearly 9 out of 10 -- have a different size board today than they had 10 years ago. Among the 100 companies, 27 have added directorships, while 62 have reduced the size of their boards.

In many instances, the change in board size over the past decade has been substantial. In fact, 32 of the SSBI companies -- roughly a third -- have added or subtracted 4 or more directorships since 1980.

Currently, those companies with the largest and smallest boards are:

Largest: Security Pacific Corp. (22), Chase Manhattan Corp. (22), Citicorp (22), Philip Morris Cos. Inc. (21), General Motors Corp. (20), and Southern Co. (20).

...