In today’s briefing:
- Headline Is Eye Catching, but the Revised Voting Criteria Do Not Affect Most Companies
Headline Is Eye Catching, but the Revised Voting Criteria Do Not Affect Most Companies
- The “minimum majority of outside directors” is an eye catcher, but it does’t affect most companies because the 1/3 outside director ratio applies if a nominating committee is in place.
- Since companies with majority of independent directors are 12.1% in prime market, the objective becomes to achieve the minimum requirement (1/3 INEDs), and few companies engage in further improving practices.
- Companies with over 50% independent director have extremely superior market values in capitalization, ROE, ROA, and Tobin’s Q. Therefore, the acceleration of increasing independent director ratios should be seriously implemented.
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