Evolving lines of responsibility between the board and management

Highlights of survey findings

Respondents, primarily corporate secretaries, in-house counsel, and other in-house governance professionals, represent 101 public companies of varying sizes and industries¹ and the findings pertain to these companies. The actual number of responses for each question is provided. Some survey results may not sum to 100% as questions may have allowed respondents to select multiple answers. Where applicable, commentary has been included to highlight differences among respondent demographics.

What practices does your company utilize to establish a mutual understanding among the board and management of their respective roles and responsibilities? [Select all that apply] (98 responses)

Companies commonly rely on their governance documents, such as corporate governance guidelines, along with other practices, to delineate board vs. management responsibilities. Notably, of companies with a lead director (46% of all companies), 55% have a lead director role description. In comparison, of those with a non-executive chair (16% of all companies), 23% have a description for that role. The greatest variation among market caps was with respect to having director role descriptions, reported by 10% of large-caps and 30% of mid-caps.

Indicate the approval authority of your board with respect to the development/update of the following activities. [Select all that apply] (71 responses)

Among market caps, the greatest variations pertained to:

• Board committee approval required for:
  • Succession plan for C-suite (or equivalent) other than CEO, reported by 32% of large-caps and 9% of mid-caps
  • Sustainability strategy, reported by 32% of large-caps and 11% of mid-caps
  • Code of conduct/ethics for below C-suite (or equivalent), reported by 13% of large-caps and 32% of mid-caps
• Board committee review only for compensation and benefits programs for workforce below C-suite (or equivalent), reported by 35% of large-caps and 54% of mid-caps
• No board or board committee review or approval required for shareholder engagement strategy, reported by 32% of large-caps and 11% of mid-caps

Endnote

¹ Public company respondent market capitalization as of December 2023: 42% large-cap (which includes mega- and large-cap) (> $10 billion); 51% mid-cap ($2 billion to $10 billion); and 8% small-cap (which includes small-, micro-, and nano-cap) (< $2 billion). Respondent industry breakdown: 26% financial services; 24% energy, resources, and industrials; 23% consumer; 15% technology, media, and telecommunications; and 13% life sciences and health care.
Small-cap and private company findings have been omitted from this report and the accompanying demographics report due to limited respondent population.