More dual-class voting, majority votes, board diversity—those are the results of Fenwick’s governance survey

Fenwick & West loves its governance surveys. The latest, coming only a month after its proxy survey, covers a broader range of companies and practices. The law firm says, “This in-depth survey was developed as a resource for board members, senior executives, in-house legal counsel and their advisors, based in Silicon Valley and throughout the United States.”

Here are some of the findings:

  • Adoption of dual-class voting stock structures is a clear trend among Silicon Valley technology companies—among the mid-to-larger SV 150 companies—though it is still a small percentage of companies.
  • Classified boards are now more common among the technology and life sciences companies in the SV 150 than among the S&P 100 companies. Compared to the prior year, classified boards increased from 50.7% in 2018 to 52.7% in the 2019 proxy season for the full SV 150 (new companies joining the list generally have classified boards, while some departures did not). 
  • The rate of implementation of some form of majority voting has risen substantially over the period of this survey.  The increase is dramatic among S&P 100 companies, rising from 10% to 96% between the 2004 and 2019 proxy seasons.
  • Stock ownership guidelines are more common to both groups but the SV 150 only recently surpassed the level of the S&P 100.
  • 2019 continued the long-term trend in the SV 150 of increasing numbers of women directors and declining numbers of boards without women members. The rate of increase in women directors for SV 150 overall continues to be higher than among S&P 100 companies. Companies with at least one woman director went from 82% to 91.3% over the past year for the SV 150. Over a two-year period the percentage of companies with at least one woman director grew by 13.1 percentage points.
  • The number of executive officers tends to be substantially lower among SV 150 companies than among the S&P 100, and there continues to be a general decline in the average number of executive officers per company in both groups.