As public company board service has become increasingly imperative and time-consuming, proxy advisory firms and institutional investors have sharpened their focus on directors who serve on an excessive number of boards. Overboarding concerns have become a key driver for recommendations or votes against director elections in recent years. For example, in its latest investment stewardship report, BlackRock reported that it voted against 163 directors at 149 companies in the Americas on the basis of overboarding from July 1, 2020 to June 30, 2021.
Public companies must stay informed of the director overboarding policies of their key institutional investors and consider how they may impact director elections and whether the company’s own overboarding limits should be revised in light of policies in place at key investors. The chart below summarizes the overboarding policies of proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) as well as several large institutional investors.
