November 20, 2015

National Association of Corporate Directors (NACD) and Major Institutional Investors Identify 2016 Priorities for Corporate Boards

The two biggest proxy advisory firms are cracking down on board members with too many seats.Institutional Shareholder Services on Friday said it will consider a non-CEO director on five public company boards to be “overboarded,’’ down from its earlier policy of six. The group, which makes recommendations to large institutional shareholders on corporate governance, said under the new policy, starting in 2017, it will issue a negative recommendation if a director serves on more than five corporate boards. The one year grace period is to give “directors and companies sufficient time to make any changes.”The adviser is maintaining its stricter policy for sitting chief executives, who it considers to be overboarded if they have more than two outside directorships.

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