January 25, 2010
Does your company’s board composition conform with new SEC rules for 2010?
Does your company’s board composition conform with new SEC rules for 2010? To answer, begin by asking the right questions. (First of three posts on new requirements found in Item 407(h) of Regulation S-K under the Securities Exchange Act of 1934.)
Starting in the 2010 proxy season, all U.S. public companies are required by the SEC to describe their board composition model and why they chose it. In order to frame a company's responses with an eye toward their strategic goals, it’s not only an issue of asking the right composition questions – but the most relevant.
As the drafts of new disclosure statements are created, here are a few of the questions directors should ask themselves and those that support the work of the new disclosures:
1. Is our board composition working for us?
2. How does our board composition compare to our industry peers?
3. What concerns do our stakeholders have about our leadership?
4. Is our self-perceived role out of alignment with that of key stakeholders?