Benchmarking boards of directors for better corporate governance

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Abstract

The key question and major lessons learned in this research are that individual companies and their boards of directors could use the board director benchmarking information compiled in the Conference Board Report to assess their own boards of directors’ corporate governance practices. For an initial benchmarking approach, this paper compared a poor long-term market performance company (Grove & Clouse, 2019) with a strong long-term market performance company (Grove & Lockhart, 2019). The following benchmarked differences in the boards of directors of these two companies were key success factors for constellation: specific industry knowledge, younger directors, coaching/nurturing, involved roles, long-term compensation of directors, no board entrenchment, board assessment, and board committee rotation. The major sections of this paper are literature review, corporate board practices, benchmarking board of directors: poor long-term market performance example, benchmarking board of directors: strong long-term market performance example, conclusions, and future research. A major limitation of this paper, which could be investigated in future research, is to analyze benchmarked board categories to see if they help explain differences in comparative long-term market performances by many companies since companies and their markets are diverse.

Keywords: Benchmarking Boards of Directors, Corporate Governance

Authors’ individual contributions: Conceptualization – H.G.; Methodology – H.G. and T.X.; Resources – M.C.; Writing – Original Draft – H.G.; Writing – Review & Editing – M.C. and T.X.; Visualization – T.X.; Funding Acquisition – M.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, G30

Received: 13.02.2020
Accepted: 28.05.2020
Published online: 29.05.2020

How to cite this paper: Grove, H., Clouse, M., & Xu, T. (2020). Benchmarking boards of directors for better corporate governance. Corporate Board: Role, Duties and Composition, 16(2), 8-18. https://doi.org/10.22495/cbv16i2art1