The presentation by James M. Citrin discusses the importance of building and developing a world-class board of directors, highlighting Spencer Stuart's strategic partnerships, market presence, and governance expertise. Key statistics include the background of new board members and the persistent need for diversity, particularly noting the disparity in representation of women and minorities on S&P 500 and tech boards. The document emphasizes the value of board experience for positive total shareholder return, particularly for first-time CEOs.

1. "Why Boards Matter: Building and
Developing a World Class Board of Directors”
James M. Citrin
Leader CEO Practice
Spencer Stuart
1

2. INTRODUCTION
This presentation was done in connection with the program, “Why Boards
Matter: Building and Developing a World Class Board of Directors,” co-hosted by
Spencer Stuart and Kleiner, Perkins, Caufield and Byers. To set the stage we
reviewed:
• Spencer Stuart’s strategic partnership with Kleiner Perkins
• Our Board Practice’s market leading presence
• Approximately 700 director searches globally
 42 percent of Fortune 100
 One-half of assignments were for companies under $1 billion in revenue
• State-of-the-art governance expertise and thought leadership
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3. INPUT FOR THIS PRESENTATION
30 years
SURVEYMONKEY SURVEY
Boards Interested
Executives
42
S&P 500
Board Demographics
Trends
⋆
➲
➚
✓
SPENCER STUART BOARD INDEX
3
SPENCER STUART U.S.
TECHNOLOGY BOARD INDEX
4 years
Top 200 U.S. Tech Companies
Board Demographics
Trends
⋆
➲
➚
✓

4. WHAT ARE BOARDS
LOOKING FOR?
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5. 52%
48%
1 or more
No new directors
ADDED NEW DIRECTORS IN 2015
S&P 500 AND U.S. TECH BOARD INDEX
S&P 500
5
53%
47%
TECH BOARD INDEX

6. 18%
20%
24%
31%
Retired
CEO/COO
Active
CEO/COO
Financial
Expertise
Women
BACKGROUND
AND
EXPERTISE OF
ADDED BOARD
MEMBERS IN
2015
S&P 500
6

7. NEW DIRECTOR BACKGROUND WISH LIST
S&P 500
65%
58%
54% 52% 51%
41% 41%
27%
21% 20% 16%
14% 13%
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8. 8
65%
58%
54%
52% 51%
41% 41%
27%
21% 20%
16%
14%
38%
71%
29%
55%
24%
10%
76%
43%
12% 14%
57%
33%
0%
10%
20%
30%
40%
50%
60%
70%
80%
S&P 500 Boards Interested
S&P 500 NEW DIRECTOR BACKGROUND WISH
LIST COMPARED TO BOARDS INTERESTED
CEOS

9. SNAPSHOT OF BOARDS INTERESTED
EXECUTIVES
17%
55%
55%
55%
0% 20% 40% 60%
None
NFP
Private
Public
EXPERIENCE INTERESTS/GOALS
17%
31%
60%
64%
0% 20% 40% 60% 80%
Help/Add Value
Experience for new
role
Experience for
existing role
Build portfoilio
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10. THE VALUE OF
BOARD
EXPERIENCE
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11. MARKET CONTEXT:
S&P 500 CEO TRANSITIONS
2004-2015
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Internals Externals Other*
11*Other includes: From Board, Former Executive, Insider-Outsider

12. 68%
59%
Positive TSR
with Board
Experience
Positive TSR
without
Board
Experience
FIRST-TIME CEOS WITH PUBLIC COMPANY
BOARD EXPERIENCE
2012-2015
INTERNAL FIRST-TIME CEOS EXTERNAL FIRST-TIME CEOS
36%
64%
Without Board
Experience
With Board
Experience
47%
53%
Without Board
Experience
With Board
Experience
78%
20%
Positive
TSR with
Board
Experience
Positive
TSR without
Board
Experience
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13. LET’S TALK ABOUT
DIVERSITY
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14. MINORITIES AS A PERCENTAGE OF DIRECTORS
TOP-200 BOARDS IN THE S&P 500
76%
9%
8%
5%
2%
All non-minorities
African-American
Non-U.S.
Hispanic/Latino
Asian
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15. FEMALE REPRESENTATION ON BOARDS
S&P 500 AND U.S. TECH BOARD INDEX
• In the S&P 500 female and male CEOs have different
board compositions
 28% of directors are women at companies with a female CEO
 19% of directors are women at companies with a male CEO
 Technology company boards with at least one female
director increased from 72% in 2014 to 75% in 2015
 Technology boards significantly trail the S&P 500 in
female representation; 97% of S&P 500 boards have at
least one female director
 Women represent 14% of the total number of directors on technology
boards versus 19.8% of S&P 500 directors
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16. "Why Boards Matter: Building and
Developing a World Class Board of Directors”
16