Board Composition
The mix of skills, independence, and backgrounds among a company's board directors.
What is Board Composition?
Board composition refers to the overall makeup of a company's board of directors, encompassing the professional skills, industry expertise, independence, tenure, diversity, and financial literacy of its members. Governance best practices promoted by institutional investors and proxy advisors such as ISS and Glass Lewis emphasize a balance of independent directors — who provide objective oversight — with directors holding relevant operational or strategic expertise. Boards are typically evaluated on gender and ethnic diversity, as research links diverse boards to stronger risk management and long-term performance. Board composition is periodically reviewed by the nominating and governance committee.
Example
Microsoft's board as of 2024 consists of 13 directors, of whom 11 are independent. The board includes former CEOs, technology executives, and financial experts. Women represent approximately 38% of board members, reflecting the company's commitment to diversity in board composition.
Source: Microsoft Corporation — 2024 Proxy Statement (DEF 14A)