Analyzing Board Directors' Compensation Structures
Intro
As the cornerstone of corporate governance, the compensation of board directors plays a pivotal role in steering an organization towards its goals. Understanding these compensation structures reveals not just how much directors are paid, but also the values and priorities of the companies they serve. This piece dives into the intricate web of remuneration, dissecting the factors that shape these compensation packages and the varying models used across industries.
In today's competitive landscape, where attracting and retaining talent at the board level is imperative, analyzing compensation structures becomes essential. The stakes are highâeffective governance can influence everything from stock performance to organizational reputation. Therefore, this exploration encompasses various dimensions including industry standards, geographic variances, and regulatory impacts on compensation decisions.
The significance of this topic cannot be overstated. By unraveling the complexities behind board compensation, one can better appreciate the relationship between pay and performance, while also gaining insights into how governance impacts overall corporate health. Let's embark on this journey into the realm of board director compensation.
Understanding Board Compensation
Understanding board compensation is pivotal in the corporate landscape. It serves as a reflection of how organizations value their leadership and the intricate relationship between financial performance and governance. In this piece, we take a closer look at the structures that underpin how board directors are compensated. High levels of board compensation can often lead to scrutiny, especially when tied to the companyâs performance.
Furthermore, knowing the various compensation components can shed light on how companies maintain accountability and align director performance with shareholder interests. By dissecting these systems, one gains a better understanding of the motivations and implications tied to these monetary arrangements. Itâs crucial not only for existing board members or potential candidates but also for stakeholders who wish to gauge how effectively their investments are managed.
Definition of Board of Directors Compensation
Board of directors compensation refers to the total financial and non-financial rewards enjoyed by directors serving on a companyâs board. This encompasses not just the direct monetary payments but also the benefits arising from equity stakes, perquisites, and other types of remuneration. The overarching aim of this compensation model is to incentivize performance while ensuring that the directors' interests align with those of the shareholders.
Types of Remuneration
The types of remuneration available to board directors can be categorized into various forms, each carrying its own set of advantages and drawbacks. Here, we break down these components:
Cash Salary
Cash salary is often the linchpin in board compensation packages. This fixed amount provides immediate and consistent income to directors, ensuring they're compensated for their time and effort. The key characteristic of a cash salary is its straightforward nature, offering certainty amidst a variable compensation landscape.
One might argue that a cash salary is a popular choice for many reasons:
- Stability: It offers directors predictable compensation, which can be essential for financial planning.
- Simplicity: Easy to understand and measure against responsibilities and obligations.
However, a cash salary does have its unique features that might pose challenges:
- Limited Incentives: It may not inherently motivate directors to drive long-term company performance, as it lacks performance-related components.
Equity Compensation
Equity compensation offers a different flavor in the board remuneration discussion. This form of payment ties directorsâ rewards directly to the performance of the companyâs stock, aligning their interests with those of shareholders. The essential aspect of equity compensation is that it represents a stake in the companyâs growth and success.
Equity compensation is frequently viewed as a beneficial choice due to several reasons:
- Alignment of Interests: Encourages directors to act in the best interests of shareholders, as their rewards are contingent on stock performance.
- Potential for Significant Gains: Depending on company performance, the value of equity can surpass standard salary, motivating long-term strategic thinking.
Nevertheless, equity compensation comes with its own unique features:
- Volatility: Its value can fluctuate significantly based on market conditions, which might lead to uncertainty.
Fees for Board Meetings
Fees for board meetings are yet another component of board compensation structures. These payments are typically made for attending scheduled board meetings and play a critical role in ensuring that directors are compensated for their time during these engagements. A hallmark of this component is its direct link to participation and engagement in board activities.
This type of remuneration holds appeal for several reasons:
- Direct Compensation for Time: Board members are paid directly for their efforts in engagement, reflecting accountability and commitment.
- Flexible Structures: Fees can vary based on the type of meeting (e.g., regular sessions versus special committees) and can often be adjusted to reflect the increasing complexity of decision-making in todayâs corporate environment.
Despite its advantages, fees for board meetings carry unique challenges:
- Could Encourage Minimum Effort: If structured inadequately, it risks incentivizing attendance without encouraging meaningful participation.
Factors Influencing Compensation Levels
Understanding the various factors that influence compensation levels for board directors is essential for multiple reasons. These factors not only shed light on how remuneration packages are crafted but also indicate the underlying market dynamics at play. In addition, by analyzing these aspects, stakeholders can make informed decisions and better understand the financial allocations within their organization.
Company Size
The size of a company significantly impacts the compensation of its board directors. Large corporations often have more complex operations, requiring experienced individuals who can navigate the intricacies of governance. As such, these firms tend to offer higher compensation packages to attract and retain top talent. For example, a director at a Fortune 500 company may earn several times more than someone serving on the board of a small startup.
Several variables come into play:
- Revenue: Companies with higher revenues typically have bigger budgets for director compensation. They tend to offer not just salaries, but also a mix of benefits that might include stock options and performance bonuses.
- Employee Headcount: A larger workforce often correlates with increased responsibilities for board members, thus justifying higher pay.
- Market Position: Companies that are leaders in their field can afford to pay more than those who are struggling or just gaining a foothold.
Industry Standards
Industry standards significantly shape board compensation, ensuring that remuneration remains competitive and reflective of market trends. Each industry has its own norms, influenced by profitability, regulatory requirements, and typical risk profiles. For instance, the tech sector is known for high equity compensation due to the volatile nature of its revenues, as opposed to more stable industries like utilities or healthcare, where compensation structures might lean more towards fixed salaries.
Key points that illustrate the influence of industry standards include:
- Benchmarking: Companies often look to compensation surveys, industry reports, and peer comparisons to set appropriate pay.
- Regulatory Environment: Different industries face varying levels of regulation, which can influence compensation designs. Financial institutions, for example, have faced stricter guidelines post-financial crisis, impacting how bonuses and incentives are structured.
- Performance Metrics: Industries with high performance volatility may tie compensation more directly to individual or company performance compared to industries that offer stable returns.
Geographic Difference in Compensation
Geographic location plays a pivotal role in determining board compensation, influenced by cost of living, local demand for talent, and competitive landscapes. For instance, board members in major financial hubs like New York or London could see drastically higher compensation compared to those in smaller cities or emerging markets.
Several aspects highlight this geographic disparity:
- Cost of Living: Major cities typically have a higher cost of living, which directly affects salary expectations and structures.
- Talent Pool: Regions with a dense concentration of corporate leadership and expertise could drive up compensation as firms compete for limited talent.
- Economic Conditions: Economic prosperity or downturns in specific areas can impact director remuneration, where firms in flourishing regions might compensate more generously to retain high-caliber board members.
Understanding these influential factors enables stakeholders to grasp the complex web of decision-making that shapes board compensation structures. This comprehension can lead to more strategic governance decisions and a clearer expectations alignment among directors, shareholders, and stakeholders.
Comparative Analysis of Board Compensation
The compensation of board directors is a multifaceted subject that can vastly differ based on various factors. This comparative analysis is paramount, shedding light on the discrepancies and similarities in compensation structures. It goes beyond mere numbers, examining the why and how behind varying compensation levels. Understanding these nuances is particularly relevant in todayâs corporate landscape where transparency and equity have taken center stage.
Public vs. Private Companies
When comparing compensation in public versus private companies, it becomes clear that the two operate under different constraints and incentives. Public companies, for instance, are often accountable to a broader audience, which includes shareholders and regulatory bodies. This responsibility can manifest in higher compensation packages for their directors, designed to attract and retain top talent in a competitive market. A study by Harvard Business Review has indicated that average compensation for board directors in public companies can significantly exceed that of their private counterparts by as much as 20 to 40%.
Conversely, private companies tend to have greater flexibility when it comes to compensation structures. Their boards may opt for lower direct pay, compensating instead with performance-based rewards. This approach often aligns the interests of directors with the long-term success of the company, fostering a culture of commitment over mere monetary reward.
Comparison Across Industries
Diving deeper into industry-specific compensation reveals even more disparities. For example, in the technology sector, where rapid growth and innovation are common, board directors often command higher compensation compared to more traditional sectors like manufacturing or agriculture. A 2022 analysis from Deloitte illustrated that directors in tech companies received average compensation packages of over $200,000 annually, while those in agriculture hovered around $70,000.
The differences can often be attributed to risk and expected returns in each industry. Higher risk typically translates into higher potential rewardsâhence the lucrative packages in sectors poised for exponential growth. In addition, industries with stringent regulations, such as healthcare and finance, may offer competitive salaries and bonuses as a way to mitigate compliance risks through experienced board leadership.
Regional Variations in Pay
Beyond industry and company type, regional differences play a substantial role in dictating board compensation. A director seated in Silicon Valley can expect to earn significantly more than one in a mid-sized town in the Midwest. For instance, compensation data from the National Association of Corporate Directors indicates that California-based companies tend to offer 30% higher director salaries on average than those in the Southeastern United States.
Economic factors, local living costs, and competitive demand for talent contribute to these variations. In areas where high-tech industries dominate, pay often escalates in tandem with the cost of living, creating a compensation gap that reflects both the talent pool and competition for skilled board members.
"Understanding these variations is crucial for stakeholders looking to benchmark their boards effectively and to ensure they are positioned competitively in their respective markets."
Overall, by comparing compensation structures across public and private companies, different industries, and various regions, one can gain profound insights into the rationale behind board compensation. These analyses not only inform decision-makers but also enhance transparency and governance in corporate structures.
Compensation Package Structures
Understanding compensation package structures is essential to grasp how board directors are rewarded for their oversight and direction. These structures go beyond mere figures on a paycheck; they reflect a company's values, strategic objectives, and approach to corporate governance. A well-defined compensation package is critical not only for attracting top talent but also for aligning the interests of the directors with those of the shareholders.
Fixed vs. Variable Compensation
When we talk about fixed and variable compensation, we're dissecting the two major components that form the backbone of director pay. Fixed compensation usually includes base salary or retainer fees, serving as a steady income stream.
- Fixed Compensation:
This is the set amount paid to board members, regardless of the company's performance. It provides a predictable financial foundation, allowing directors to focus on governance without worrying about income volatility. For instance, some directors might receive an annual salary of $100,000 or even more, ensuring they are compensated for their time and expertise. - Variable Compensation:
On the flip side, variable compensation is performance-driven. It varies based on specific targets or milestones, aligning the interests of the board with shareholder value. This could include bonuses tied to financial metrics, stock options, or other equity incentives. For example, if a company's net profit exceeds a defined threshold, directors might receive bonuses in the range of 20-50% of their fixed salary.
This dual structure addresses the need for stability through fixed pay while incentivizing directors to work towards enhancing company performance through variable pay. It's a balancing act, ensuring that directors are rewarded for their contributions while also being held accountable for their decisions.
Performance-Based Pay
Performance-based pay is a significant aspect of the compensation structure that reflects a growing trend in the corporate world. This compensation model ties director pay directly to the company's success, benefiting both shareholders and the directors themselves.
- Alignment of Interests:
By linking a portion of compensation to performance metrics like share price or ROI, a company signals that it values results over mere presence. If the business thrives, so do the board members. This fosters a culture of accountability and alignment of interests. - Types of Performance Metrics:
The metrics used to determine performance-based pay can vary widely. Commonly, companies might utilize: - Potential Risks:
While performance-based pay can drive results, it is not without risks. In some instances, directors may focus on short-term gains at the expense of long-term stability. Therefore, itâs crucial to create a balanced performance framework that encourages sustainable growth rather than a quick buck.
- Earnings per share (EPS) growth
- Total shareholder return (TSR)
- Revenues or profit margins
Overall, the structure of compensation packages can significantly impact how directors perform and make decisions. Aligning compensation with performance not only incentivizes directors but can also enhance corporate governance standards and ultimately benefit the overall health of the organization.
"A well-balanced compensation structure can turn a board into a powerful force for positive change in a company, rather than just a rubber-stamping entity."
As these structures continue to evolve, understanding the components of fixed, variable, and performance-based pay is essential for financial enthusiasts and investors looking to assess how well a company is governed.
Role of Shareholder Input
Say on Pay Votes
The introduction of "say on pay" votes was a game changer in the realm of corporate governance. These non-binding votes allow shareholders to express their approval or disapproval of executive compensation packages during annual meetings. The rationale behind this move was straightforward: empower shareholders by providing them a voice regarding issues that directly affect their investments.
- Transparency and Accountability: One of the major benefits of say on pay votes is that they promote transparency. Companies must disclose detailed information about their compensation packages, which allows shareholders to assess whether such remuneration is justified based on company performance. This openness fosters a sense of accountability among directors since they know they could face direct shareholder backlash if their compensation appears excessive relative to company results.
- Potential Consequences: While these votes are advisory and not binding, a significant rejection of a compensation plan can lead to wider implications. For instance, after a negative vote, companies often revisit their compensation structures, potentially resulting in adjustments that better reflect shareholder interests. Repeated criticisms can even lead to a shake-up in the board's make-up, as shareholders could push for new leadership that reflects their values.
"The rhythm of the corporate world can change through the collective voice of shareholders; say on pay votes exemplify this power."
Impact of Activist Investors
Activist investors have emerged as a powerful force in shaping compensation structures by directly challenging boards and their remuneration strategies. These shareholders often possess substantial stakes in the companies they target and advocate for changes that they believe will improve value for all shareholders.
- Raising the Stakes: Activist investors can initiate campaigns to adjust director pay, promoting a performance-based model that's tied closely to corporate success. Their methodologies can include proposing specific compensation metrics that would tie board membersâ pay to stock performance, revenue growth, or dividend distributions. The rationale is simple: if directors are incentivized based on actual company performance, they are likely to work harder to enhance shareholder value.
- Campaign Strategies: Activist investors often engage in a series of tactics to influence board decisions on compensation. They may launch public campaigns to draw attention to perceived inequities or inefficiencies in compensation plans. This can include calling for annual meetings, engaging media, or even bringing legal challenges. Their visibility often rallies support from smaller shareholders who may share the activists' concerns, bolstering their campaign.
- Ripple Effects on Compensation Structures: The actions of activist investors depict a broader trend towards heightened scrutiny in board compensation. Their presence not only pushes companies to reevaluate their pay structures but sets a precedent for other shareholders to follow suit. Companies that respond proactively to these pressures often find themselves winning the favor of their investors.
In summary, the role of shareholder input in shaping compensation structures is pivotal. It highlights the increasing importance of aligning directors' pay with shareholder interests and the growing influence of both traditional and activist investors in this dynamic.
Trends in Board Compensation
Understanding the current trends in board compensation is crucial for grasping how corporate governance is evolving. Just like any other business practice, compensation strategies are not set in stone. They reflect broader societal shifts, corporate priorities, and stakeholder expectations. In essence, these trends not only dictate how directors are paid but also influence the overarching culture within companies.
Moreover, the discussion surrounding board compensation has garnered attention from various stakeholders, including shareholers, management teams, and the general pubic. Keeping a pulse on these trends can unveil critical connections between pay structures and company performance.
Recent Changes in Compensation Strategies
In recent years, there have been fundamental shifts in how compensation is structured for board members. Notably, a growing emphasis on performance-based pay stands out. While cash salaries still form a foundational aspect, companies are increasingly tying compensation to concrete performance metrics. This strategy ensures directors have skin in the game when it comes to driving growth and profitability.
- Shifting from Cash to Equity: Many boards are now favoring equity compensation over cash. This shift aims to align the interests of directors with those of shareholders. When directors own shares, theyâre more likely to think twice about decisions that could affect stock prices.
- Emphasis on Long-Term Performance: Firms are adopting compensation strategies that reward long-term company performance rather than short-term gains. This approach can lead to greater stability and sustainability, and aligns with investor interests who seek growing stewardship for their investments.
- Peer Benchmarking: There's a trend towards assessing compensation levels against peer companies. This strategy ensures that compensation packages remain competitive and again aligns with investor sentiment. Itâs not just about the board members themselves; it reflects an entire industryâs strategy and performance.
Increasing Focus on Diversity and Inclusion
The conversation about diversity and inclusion is reshaping not only the composition of boards but also remuneration practices. Companies are recognizing the value of diverse perspectives and experiences on their boards, leading to more equitable pay structures.
- Diversity in Representation: Many organizations are setting specific goals for diversity within their board members and ensuring that compensation reflects this commitment. Itâs no longer only about gender diversity but also encompasses race, background, and professional experience.
- Inclusion in Pay Equity: A growing push towards ensuring all board members are compensated fairly has emerged. Discrepancies in pay often reflect broader societal issues. Addressing these gaps promotes a culture of fairness and equity, which benefits the organization overall.
- External Pressures: Companies are also feeling the heat from external factors such as activist investors and public scrutiny. Stakeholders are demanding transparency in pay practices which compels companies to adopt more inclusive compensation structures.
"The evolving nature of board compensation reflects not only shifts in company culture but also broader societal shifts that demand accountability and transparency."
As these trends unfold, they will continue to influence how compensation structures are established and perceived, making it essential for directors and stakeholders alike to stay attuned to the changing landscape of governance and board remuneration.
The Regulatory Framework
The landscape of board director compensation isnât just shaped by market forces and company policies. The regulatory framework plays a pivotal role, defining the boundaries and standards within which compensation packages must be structured. Understanding these rules isnât merely advantageous; itâs essential for both directors and stakeholders alike. Regulations can dictate much of the remuneration designâfrom required disclosures to compliance with governance standards.
Adhering to these frameworks aims to enhance transparency and accountability in corporate governance. This section dives into the legal guidelines surrounding director compensation and the corporate governance standards that influence these practices. Whatâs more, compliance with these regulations helps to align the interests of directors with those of shareholders, fostering trust and stability.
Legal Guidelines on Director Compensation
Legal guidelines around director compensation set the groundwork for how organizations can design their pay structures. In many jurisdictions, laws mandate that companies disclose the monetary particulars of their board membersâ compensation in annual reports. In the United States, for instance, the Securities and Exchange Commission (SEC) demands that public firms include detailed compensation information in their proxy statements. This isnât just a box-checking exercise; it serves several important purposes.
- Transparency: Having clear rules ensures that board compensation is laid out transparently, allowing shareholders to scrutinize and compare compensation packages.
- Fairness: The guidelines strive to foster equitable compensation practices across the board, preventing unfair salary disparities that can arise in the absence of oversight.
- Accountability: By knowing that their pay is public and subject to analysis, directors may feel a heightened sense of accountability, leading to more responsible decision-making.
"A well-structured regulatory guideline not only protects the shareholders but also enhances the integrity of the board's decisions."
These guidelines also range from requiring independent compensation committees to assessing the alignment of pay with performance. Furthermore, in some nations, there are legal stipulations mandating that shareholders have a âsay on payâ, giving them a direct voice in how much directors earn.
Corporate Governance Standards
Corporate governance standards encompass a broad array of practices focused on aligning the interests of various stakeholders. These standards set the stage for a unified framework that informs how director compensation is assessed and structured. Elements of corporate governance include various policies, controls, and guidelines that companies adopt to promote fairness, accountability, and transparency.
Key aspects include:
- Board Independence: Effective governance suggests that compensation committees should ideally consist of independent directors to ensure that compensation isnât overly influenced by internal forces.
- Performance Metrics: Organizations are encouraged to adopt transparent performance metrics to determine compensation. Tying pay to measurable outcomes can help bolster credibility.
- Regular Reviews: Governance best practices dictate that compensation packages should be reviewed regularly to ensure they remain relevant and competitive, reflecting the evolving market landscape.
By adhering to these standards, companies can foster a more robust governance culture. It cultivates an environment where director compensation is rationalized, justified, and aligned with shareholders' long-term interests.
Implications of Compensation Levels
The implications surrounding compensation levels for board directors are critical in understanding the broader impact on organizational health and performance. Board remuneration is not just about lining pockets; it reflects an intricate balance between governance and performance. When compensation is aligned correctly, it often leads to improved oversight, strategic direction, and higher levels of accountability. Conversely, misalignment can breed discontent among stakeholders, and spark criticisms of corporate governance practices.
Effect on Corporate Governance
Corporate governance suffers when board directors are compensated in ways that disconnect them from the companyâs performance. If the pay structure is excessively lavish, it may lead to a perception, or even a reality, of negligence. Directors who receive hefty paychecks without corresponding accountability may prioritize personal gain over shareholders' interests.
For example, if a director is rewarded for short-term profits without consideration for long-term sustainability, it may result in strategic decisions that harm the companyâs future. Shareholders might start questioning the integrity of board members, leading to strained relations between management and investors.
Furthermore, the compensation level can send a strong signal to the market about a companyâs values and ethics. When boards are seen as favoring their financial interests over the company's well-being, it raises yellow flags about management priorities.
"Inadequate oversight due to inflated compensation can lead to operational inefficiencies and also foster a culture where directors are less inclined to challenge management openly."
Link to Financial Performance
The connection between board compensation and financial performance is a subject of significant interest. Essentially, when board members are compensated based on the long-term success of the company, thereâs a stronger incentive to make responsible, performance-oriented decisions.
Research indicates that performance-based remuneration, which often comprises equity forms such as stock options, aligns the interests of directors with those of shareholders. When directors have skin in the game, they are more likely to make decisions that will drive efficiency and profitability.
However, this can be a double-edged sword. If not structured properly, performance metrics can lead directors to focus on short-term results at the expense of necessary long-term investments. This misguided focus can significantly hamper financial health in the long run.
To further explore the importance of nuanced structures in board compensation, visit Wikipedia for foundational insights or check out Britannica for broader contexts.
Case Studies
The inclusion of case studies in this exploration of board director compensation structures stands out as a vital component. These real-world examples provide context and clarity, illuminating how theories and guidelines translate into actual practice within various organizations. By examining the catering to specific industries, company sizes, and governance models, readers can gain a far more nuanced understanding of the dynamics at play.
Case studies allow us to dissect the structures, compensation packages, and the decision-making processes that lead to the remuneration practices employed by boards. They equip learners with the ability to identify patterns, making connections between compensation strategies and company performance outcomes. Furthermore, studying specific companies offers valuable insights into best practices and potentially hazardous pitfalls to avoid.
- Specific elements: Case studies highlight the complexity of compensation relationships, illustrating the tension between shareholder interests and the rewards offered to directors.
- Benefits: They add layers of specificity and resonance that pure theoretical discussions may lack. With diverse case studies, one can understand not just what compensation levels are, but also the why behind them.
- Considerations: It is essential to recognize industry variations; what may work in one sector might not translate effectively into another due to unique market pressures and expectations.
Now letâs examine notable companies and their compensation structures.
End
The conclusion of this article draws attention to the multifaceted nature of board directorsâ compensation. As organizations navigate the complex landscape of governance, understanding these compensation structures is essential. It not only reflects the company's values and priorities but also influences shareholders' perceptions and engagement. Key elements in assessing board compensation are the methods of remuneration, the motivations behind pay structures, and how effectively they tie to company performance.
A well-structured compensation package can incentivize boards, align their interests with those of shareholders, and ultimately protect the organizationâs reputation in the market. However, transparency remains paramount; itâs crucial that companies disclose their compensation practices clearly to avoid backlash from stakeholders. The balance between offering competitive compensation and ensuring accountability is delicate yet vital for sustainable corporate success.
Summary of Key Findings
Throughout this article, we uncovered several compelling insights regarding board compensation:
- Diverse Structures: Compensation for directors isnât one-size-fits-all. There are various formsâcash salaries, equity stakes, and fees for meetingsâall tailored to entice different talents.
- Influencing Factors: Company size and industry standards significantly impact compensation levels. For instance, larger firms often provide higher pay compared to small businesses, reflecting their broader scope and complexity.
- Variation Across Regions: Geographic location plays a critical role; boards in, say, New York may command different compensations compared to those in smaller towns or international hubs.
- Impact of Governance: Adequate compensation has shown to correlate positively with effective governance, suggesting that motivated directors might contribute more proactively to company strategy.
These findings point towards a robust landscape in which board compensation is not merely a fiscal matter but a reflection of overarching governance philosophy.
Future Outlook for Board Compensation
Looking ahead, the trends and innovations in director compensation structures will undoubtedly shape the way companies operate. As we foresee:
- Increased Accountability: With growing demand for corporate governance reforms, companies will face pressure to justify compensation levels. Expect more detailed disclosures regarding performance metrics and pay ratios.
- Diversity Focus: Thereâs a tangible push towards inclusivity in boardrooms, and compensation packages will need to reflect this shift. Structures that encourage diverse perspectives are likely to become the norm rather than the exception.
- Technological Impact: The rise of digital platforms for shareholder engagement presents opportunities for real-time feedback on compensation structures. Companies might adapt their practices based on direct shareholder insights, making governance more participatory.
- Performance Metrics: The future will see an even stronger link between compensation and longer-term performance, moving beyond short-term profit goals to more sustainable measures of success.
In essence, the landscape of board compensation is continuously evolving, driven by regulatory demands, societal expectations, and market pressures. How companies navigate these changes will define not only the effectiveness of their boards but also their overall corporate health well into the future.
