In order to stand out from the competition and be successful in the 21st century, companies must establish themselves as progressive, forward-thinking entities that are ready to take on today’s complex challenges.

As a result, increasing diversity in the workplace and conducting business in a sustainable and socially-conscious manner are now recognized as key drivers of bottom-line growth and corporate reputation. Investing time, effort and resources into either, or preferably both, can bring great rewards to organizations that are prepared to approach them sincerely and with long-term commitment.

With this in mind, we developed CSR Insights as a tool for leaders who wish to explore and track the evolving social responsibility leadership model and its role in business today. Furthermore, we believe that hindsight will show many parallels between its evolution and that which we have already seen in the diversity function, including:

At the end of 2006, there were 49,783 directors on US corporate boards, serving 5,825 publicly traded companies (“What Directors Think” - The Corporate Board Member/PwC, 2006).

SEC, NYSE and NASDAQ all proposed variations on an increase in the number of “independent” outside directors, leading to new opportunities for outside executives.

In 2006, US corporate boards had an average of 1.59% inside directors per company, and 6.96% outside, “independent” directors per company.

In 2006, the Corporate Board Member/PwC report calculates 33,110 directors held just one board seat; only 671 individuals held more than 4 board seats.

The 10th Annual Corporate Board Effectiveness Study 2006/2007, conducted by the USC Center for Organization Effectiveness, states that 40% of boards surveyed have placed an upper limit on the number of boards that their independent board directors can serve on – a dramatic increase from 3% who responded affirmatively to the same question in 2001.

While this creates an increased challenge in filling board seats with experienced Board Directors, it offers significant opportunity for new outside executives.

As a result of the post-Sarbanes-Oxley changing role of the Board Director and increased accountability placed on boards, typical candidate profiles appear to be shifting from the traditional pool of (relatively homogenous) US corporate CEOs, to include a more diverse pool of potential Board Director candidates, including reports to the CEO, academics, and international executives.

One report, entitled “Who’s on Board” (by Eugene H. Fram and William J. Stevenson) states a 30% decline from 2002 to 2006 in the number of Fortune 500 outside directorships held by CEOs; another report they reference looks at companies in the Standard & Poor's 500-stock index over the same period and found a 38% drop in new outside CEO directors.

The need to attract and recruit a more diverse range of potential board candidates has required a board to reach beyond their own networks and the traditional recruiting-grounds of other public boards. The more leading-edge organizations are proactively broadening their outreach by proactively requesting a diverse slate of candidates for each and every board seat opening, often utilizing the expertise of a niche executive search firm.

All definitions below are only intended to give a brief overview of the responsibilities of each Board Committee. Each of the SEC, NYSE and NASDAQ has more detailed, specific requirements and regulations related to these committees, and many companies have added additional criteria/responsibilities of their own.

• Responsibilities include overseeing the financial reporting process, reviewing the choice of accounting policies and principles, monitoring the internal control process, and overseeing the selection and performance of the external auditors.
• In accordance with Securities & Exchange Commission (SEC) regulation, the Audit Committee must be composed of only outside directors.

• Responsible for ensuring the Board of Directors maximizes performance and minimizes risk, by proposing and monitoring the corporate governance practices adopted by the company.
• Identifies potential Board Director candidates consistent with the criteria established by the Board.
• Oversees succession planning for the CEO, and sometimes other senior management executives
• Also usually responsible for establishing criteria for assessing the “independence” of Directors, and for Code of Ethics design

• Establishes and reviews the company’s compensation strategy, in order to align compensation with corporate strategies and goals.
• Responsible for oversight and annual review of the CEO’s total compensation.
• Often also recommends base salary, bonus and other remuneration for officers, and approves benefits programs/ equity grants for senior management.
• Reviews and recommends to the Board, the annual retainer and other fees/equity grants for Board Directors, in connection with their service on the Board of Directors and various Board Committees.