Hard Times for Director Qualification Disclosures
Increased scrutiny of board composition could present a hurdle for many organizations who have not adopted robust processes for director selection and disclosure.
This was the result of increased pressure to disclose detailed director credentials, prompting leaders from Deloitte’s Center for Corporate Governance offer perspective on the 2012 proxy season.
Shareholders and regulators alike continue to have increasing access to information on director qualifications – a development that potentially opens the board up for criticism about its composition and competencies. For public companies, having a board without the appropriate experience mix could, at a minimum, create an appearance of inadequate corporate governance and difficulty navigating challenges ahead.
As companies head into the proxy season, indications are that shareholders will be focused on these director qualification disclosures. As a result, it would be prudent to take a closer look at the board, determine its strength and opportunities for improvement, and establish a plan of action to begin to address any significant gaps.
Then the company may be better-positioned to respond to inquiries in a robust, proactive manner. The board may want to consider a proactive approach to these disclosures and conduct a self-assessment.
Again, this demonstrates putting the interests of the company and its stakeholders in the priority position, and underscores a commitment to corporate governance above individual interests.