Fenwick 2013 Corporate Governance Survey Reveals Important Trends in Corporate Governance

Mountain View, CA (November 21, 2013) – Fenwick & West, one of the nation’s premier law firms providing comprehensive legal services to technology, venture capital and life sciences companies, today announced the 2013 proxy season results of its Corporate Governance Practices and Trends Survey.

The survey collects and analyzes information on the corporate governance practices of the publicly traded companies included in the Standard & Poor’s 100 index (S&P 100) and the technology and life sciences companies included in the Silicon Valley 150 index (SV 150) for the 2013 proxy season, and reflects trends over the period from the 2004 proxy season (the first following implementation of the Sarbanes Oxley Act).

“Each year this survey holds surprises with findings that are counterintuitive to our preconceptions of governance practices among publicly traded technology companies in the SV 150 and their larger counterparts in the S&P 100,” said survey author David A. Bell, partner in the corporate and securities practice at Fenwick & West.

Key findings from the survey include:

Equity ownership:  Speaking to a strength of the technology sector, the SV 150 continues to lead in the percent of equity ownership among executives and directors, seeing a spike of nearly one third from 2011 when the average was less than 10% up to an average of 13.2% in 2013. That compares to a steady 3.3% average equity ownership among S&P 100 executives and directors.

Women on boards:  Silicon Valley companies continue to trail their larger S&P 100 counterparts in this important measure of diversity. Among S&P 100 companies, 98% have at least one woman board member, while only 56.7% of the boards of SV 150 companies have one or more women board members. However, the SV 150 has continued to narrow the gap with the S&P 100 in this measure, especially when taking size into account. Among the 15 largest SV 150 companies, 93.3% have one or more women board members, and those companies more closely relate in size to companies in the S&P 100.  

Majority voting:  The trend towards majority voting continues with the gap between S&P 100 companies and SV 150 companies narrowing in 2013. From the 2011 proxy season, S&P 100 companies decreased the use of majority voting by 5% for a 92% overall adoption rate, while SV 150 companies increased the use of majority voting by 7%, with 44% adopting the practice.

Stock ownership guidelines:  The prevalence of stock ownership guidelines among SV 150 executive officers increased 9% in the past year alone up from 8% total in 2004 to a total of 53% during the 2013 proxy season. The growth in the use of these plans among S&P 100 companies has been similarly strong up from 58% in 2004 to 95% this year.

Stockholder activism:  Both the frequency and number of stockholder proposals continue to be more prevalent among S&P 100 companies. Although, over the last two proxy seasons, the largest companies in the SV 150 have closed the gap and are now comparable to the S&P 100 in terms of frequency of having a least one such proposal.

Executive officers:  The survey was expanded this year to include coverage of executive officers. The number of executive officers tends to be substantially lower in the SV 150, averaging 6.5 per company in the 2013 proxy season, compared to the S&P 100, where companies averaged 11.2 executive officers. In both groups there has been a long-term, slow but steady decline in the average number of executive officers per company, as well as a narrowing in the range of the number of executive officers in each group.

“The goal of the survey is to provide technology and life sciences companies with clear information on corporate governance practices among their peers as well as among the largest companies,” said Bell. “This is important to consider because the practices among S&P 100 companies are generally held out as the desired norm for all public companies when in actuality the technology and life sciences industries have needs that may call for specific differences in their governance practices. Fenwick & West collects this information to enable boards and executives at technology and life sciences companies to better determine when diverging practices might actually be best practices, particularly for their size.”

Complete results of the survey with related discussion are posted on Fenwick & West’s website at

About the Survey
The Fenwick & West Corporate Governance Survey, authored by law firm partner David A. Bell, provides insight into corporate governance practices of the companies included in the Standard & Poor’s 100 Index (S&P 100) and the high technology and life science companies included in the Silicon Valley 150Index (SV 150) each year. This unique body of information, covering corporate governance trends for the period following the passage and implementation of the Sarbanes-Oxley Act of 2002, is valuable for publicly traded technology and life science companies across the U.S. as well as public companies of all sizes and across industries generally.

About Fenwick & West
Established in 1972, Fenwick is one of the nation’s premier law firms, with extensive expertise in venture capital, public offerings and other corporate finance, joint ventures, M&A and strategic relationships, intellectual property, litigation and dispute resolution, taxation, antitrust, and employment and labor law.​