A research study by Manifest’s US partners, PROXYGovernance Inc(PGI), reveals some interesting trends about US board governance. PGI’s review of Russell 3000 companies holding their 2009 annual meeting prior to July 1 reveals that boards of financial services firms have added fewer new directors since the sub-prime credit crisis began than boards in any other major sector. On average, 9.0% of directors in the financial services sector had joined since the start of 2008, compared to 11.2% of directors for the index as whole. Major differences emerge across sub-sectors, however. Large financial institutions saw far higher percentages of new directors: 19.6% at diversified banks, 12.2% at investment banks and brokerages, and 18.6% at other diversified financial services firms. Bringing down the industry’s average was the regional banking sector – by far the largest component – where less than 8% of new directors had joined since the start of 2008. Average director tenure at regional banks was 10.4 years, compared to an average of 8.3 years for the total index.
Meanwhile, the US Congress has announced the formation of a 10-member commission which will investigate the causes of the current financial crisis in the US. The Commission is modeled on a similar body – The Pecora Commission -which investigated the causes of the Great Depression and will be chaired by former California State Treasurer Phil Angelides. The Financial Crisis Inquiry Commission will have wide-ranging legal powers in its calls for evidence and must issue a report by Dec. 15, 2010.
Links
Keith Hennesy, member of The Financial Crisis Inquiry Commission >>
Last Updated: 24 July 2009