1. 2 0 11 C O R P O R AT E B O A R D O F D I R E C T O R S S U R V E Y
1 2011 Corporate Board of direCtors survey

2. TA B l E O F C O n T E n T S
Introduction 2
Executive Summary: Key Results and Recommendations 2
Survey Questions and Descriptive Statistics 4
About The Rock Center for
Corporate Governance at Stanford University 21
About Heidrick & Struggles 21
Contact Information 24
Copyright © 2011 by the Board of Trustees of the leland Stanford Junior University and Heidrick & Struggles. All rights reserved

3. E x Ec u t i v E S u m m a ry:
K E y r E S u lt S a n d r E c o m m E n d at i o n S
do active Ceos Make the the board and one who will actively contribute real
Best Board Members? work as a director,” says Mr. Miles.
New Survey from Stanford’s Rock Center and Heidrick &
n CEOs of companies that have experienced public
Struggles Examines the Pros and Cons
ethical lapses are seen as far more “tainted” by
Active CEOs Might Be “Too Busy” to Be Effective the scandal than their boards are. “While only 37%
of directors believe that an ex-CEO of a company
CEOs also more tainted by ethics lapses than
that experienced substantial accounting or ethical
board directors
problems can be a good board member, 67% believe
A new survey from Stanford University’s Rock Center for a director of a similarly-plagued company can,” says
Corporate Governance and Heidrick & Struggles has Professor larcker. “Some directors do see value in
uncovered surprises about who makes the best board having a CEO who has experienced – and hopefully
directors: it’s not necessarily the current CEOs that most learned from – mistakes in judgment. But far more
companies seek out. are concerned about the stigma and perception
issues in bringing aboard a CEO like this.”
“The popular consensus is that active CEOs make the
best board members because of their current strategic n Boards are struggling to evaluate whether
and leadership experience,” says David larcker, professor prospective board members will be a good fit for
at the Stanford Graduate School of Business. In the 2011 the company. “Fifty-one percent of directors see it
Corporate Board of Directors Survey, when asked about as moderately difficult and 20% see it as extremely
potential problems a full 87 percent said that active CEOs or very difficult to gauge whether a prospect will be a
are too busy with their own companies to be effective good addition to the board,” says Mr. Miles. “Boards
directors. A third of the respondents said that active CEOs are clearly finding it a challenge to determine
were “too bossy/used to having their own way.” someone’s ‘fit.’ A single person can ruin a great
board, so boards need to spend considerable time
“It’s great to have sitting CEOs on a board, but companies
evaluating this very subjective quality.”
need to be aware of the costs associated with having
them,” says Stephen A. Miles, Vice Chairman at n More than half of directors think that board
leadership advisory firm Heidrick & Struggles. “Because turnover is too low. “The challenge of getting rid
active CEOs are so busy, they might be unavailable during of board members is that there is a widespread
a crisis or have to cancel meeting attendance at the last assumption of board ‘tenure,’” says Professor
minute. They also have less time to review materials. For larcker. “You may want to bring them on for three
some, the demands of their full-time job make it hard for to five years, but they end up staying for ten. While
them to consistently be as engaged as they need to be.” egregious problems might be taken care of more
quickly, it is much more difficult to get rid of an
Analyzing responses from 163 directors of public and
underperforming or irrelevant director who just
private companies across north America, the 2011
happens to stay on too long.”
Corporate Board of Directors Survey reveals how
directors think about the composition of the board and n Forty-six percent of companies do not engage in
the effectiveness of various types of board members. Key succession planning for their board of directors.
findings include: “Just as we found in our study last year that
companies are seriously lagging in CEO succession
n Despite the fact that sitting CEOs are highly
planning, boards aren’t doing a great job of planning
sought-after for board seats, 79% of directors
for board succession either,” said Mr. Miles. “Sixty-
said that, in practice, active CEOs are no better
six percent of directors do believe that board
than non-CEO board members. “Companies need
succession planning is an important best practice,
to differentiate between a CEO who brings caché to
but only 54% actually do it.”
2 2011 Corporate Board of direCtors survey

4. n Nearly 20% of lead directors are chosen by the 3. Tread carefully when evaluating professional
CEO or chairman. “For obvious reasons, CEOs directors as board candidates. “It’s important to
should not choose the lead director,” says Mr. Miles. remember that boards must have a good, working
“The CEO should be asked for input, but the ultimate relationship with their CEO in order to build value,”
choice needs to be made by the board.” Forty-seven says Mr. Miles. “Ideally, a professional director comes
percent of respondents said that their lead director from a background of multiple leadership positions
was elected by the independent directors, but this where he or she has a deep understanding for what
number should be much higher.” the CEO is going through. For these reasons, retired
n More than 80% of board members are somewhat CEOs have the potential to make great professional
skeptical of the value of “professional directors.” directors. They can have a constructive dialogue with
“Even though there has been a call among some the CEO and can really contribute strategically and
for increased use of professional directors — those operationally.”
who make it a full-time job to sit on boards — most 4. Take the lead director position much more
directors don’t think that professional directors are seriously. “You should conduct a succession
any better than traditional board members,” says process for your lead director just as you would for
Professor larcker. “While some respondents believe a CEO or board seat,” says Mr. Miles. “The lead
that this group’s diversity of experience is an asset director should be the most respected member on
to a board, many are concerned that professional the board — a first among equals. The nominating/
board members are too busy with other directorships governance committee needs to run this process
to be effective.” and make sure that the best director is in the
As companies think about who to bring onto the board position. It should never be rotational as not every
that can deliver the greatest value, Professor larcker director is suited for this leadership role.”
and Mr. Miles offer the following suggestions: 5. Evaluate and refresh your board. “Of course most
1. Re-think appointing the “name” CEO to the board members think they are above average,” says
board. “Yes, a company gets great publicity when it Professor larcker. “It’s human nature. However, the
recruits a big name onto the board,” says Professor evaluation process should be structured so that
larcker, “but you really need to think about what this companies get a clear understanding of who is adding
person will actually deliver in value. If they are too real value and who is not. It is time to move beyond
busy or if they don’t fit the culture or have the right check-the-box board reviews and start to seriously
chemistry, it might not be worth it.” evaluate the board’s effectiveness and its individual
directors. Once you have this information, the chairman
2. Weigh “failure” when evaluating a prospective or lead director has to be ready to have the difficult
board member. “Obviously, personal ethical lapses conversation about how a director can improve, or
should preclude someone from being chosen as whether it is better for them to step down.”
a director, but there might be value in someone
coming from a company that failed,” says Professor
larcker. “Boards need to understand what this To speak with David Larcker or Stephen Miles about
person’s contribution was to the failure. Did they this research survey, please contact Helen Chang,
learn important lessons, or are they likely to repeat Stanford Graduate School of Business, (650) 723-
past mistakes?” 3358 or chang_helen@gsb.stanford.edu; or Jennifer
Nelson, Heidrick & Struggles, (404) 682-7373 or
jnelson@heidrick.com.
3 2011 Corporate Board of direCtors survey

5. Survey QueStionS
a n d d e S c r i p t i v e S tat i S t i c S
total number of respondents = 163 responses (mostly complete) collected april to May, 2011
a. BaCkground 2. What is the revenue for the company that you
are most closely identified with?
1. What is your present position?
(Please check all that apply.) Percent
Percent <$500 million 31
chief Executive officer 15 $500 million to $1 billion 14
retired chief Executive officer 15 $1 billion to $5 billion 25
chairman of the Board 17 $5 billion to $10 billion 14
retired chairman of the Board 5 $10 billion to $20 billion 7
lead director 10 >$20 billion 9
Executive officer 13 Total Percentage 100
retired Executive officer 7
outside Board member 66 <$500 million
other 9
$500 million
to $1 billion
Chief Executive $1 billion
Officer to $5 billion
Retired Chief $5 billion
Executive Officer to $10 billion
Chairman $10 billion
of the Board to $20 billion
Retired Chairman >$20 billion
of the Board
Lead Director 0 15 20 25 30 35
5 10
Percent
Executive Officer
Retired
Executive Officer
Outside
Board Member
Other
0 10 20 30 40 50 60 70 80
Percent
4 2011 Corporate Board of direCtors survey

6. 3. What is the industrial sector for the company 5. age
that you are most closely identified with?
Percent
Percent < 30 0
natural resources 5 31 to 40 2
non-durables 12 41 to 50 12
durables 21 51 to 60 37
regulated utility 2 61 to 70 40
Wholesale/retail 7 > 70 9
Financials 13 Total Percentage 100
Services 26
High technology 14
< 30
Total Percentage 100
31 to 40
Natural
Resources 41 to 50
Non-durables
51 to 60
Durables
61 to 70
Regulated Utility
> 70
Wholesale/Retail
0 5 10 15 20 25 30 35 40
Financials Percent
6. What is your present board service?
Services
6.a. number of public, for-profit boards
High Technology
Percent
0 5 10 15 20 25 30 0 26
Percent 1 40
2 16
4. gender 3 13
4 4
Percent
5 1
Female 26
male 74
0
Total Percentage 100
1
Female 2
Male 3
0 10 20 30 40 50 60 70 80 90 100 4
Percent
5
0 5 10 15 20 25 30 35 40
Percent
5 2011 Corporate Board of direCtors survey

7. 6.b. number of private, for-profit boards 6.d. total number of boards - this is computed from
the above three questions
Percent
Percent
0 48
0 5
1 32
1 13
2 10
2 19
3 4
3 22
4 2
4 13
5 1
5 10
>5 3
>5 18
0
0
1
1
2
2
3
3
4
4
5
5
>5
>5
0 10 20 30 40 50
Percent 0 5 10 15 20 25
Percent
6.c. number of not-for-profit boards
Percent 7. are you a professional board member or
0 35 director (a director whose primary job is to
1 30 serve on boards)?
2 22 Percent
3 4 yes 29
4 6 no 71
5 2 Total Percentage 100
>5 1
Yes
0
No
1
2 0 10 20 30 40 50 60 70 80 90 100
Percent
3
4
5
>5
0 5 10 15 20 25 30 35
Percent
6 2011 Corporate Board of direCtors survey

8. B. planning for neW Board MeMBers
8. Who in your company is responsible for CEO
identifying new candidates to serve on the
board of directors (Please check all that apply): Chairman
Percent Lead Director
cEo 18 Nominating
& Governance
chairman 16 Committee
lead director 6 Full Board
of Directors
other directors 8 External
nominating & Governance committee 28 Consultants
Full Board of directors 15 Other
External consultants 6
0 10 20 30 40 50 60 70
other (please specify 1 Percent
10. When does your company typically begin the
CEO process of identifying candidates to serve on
the board: (please check only one)?
Chairman
Percent
Lead Director after an outgoing director has stepped down 6
While an outgoing director is in the process
Other Directors
of stepping down 26
Nominating Before an outgoing director announces plans
& Governance
Committee to step down 49
Full Board other 19
of Directors
Total Percentage 100
External
Consultants
Other After…
While…
0 5 10 15 20 25 30
Percent
Before…
Other
9. Who in your company has primary
responsibility for identifying candidates to 0 10 20 30 40 50 60
serve on the board (please check only one): Percent
Percent Selected other responses:
need new skills
cEo 11
When a need for a particular skill set is identified or required
chairman 14 (new expertise sought OR replacement)
lead director 1 When someone that would add value to the board is identified
nominating & Governance committee 62 Ongoing with assumed 1-2 year lead; ongoing review of
potential candidates
Full Board of directors 7
We are constantly looking to expand the Board
External consultants 2
When board assessments reveal the need for certain capabilities/
other 3 skills/insights that are not currently represented on the Board
Total Percentage 100 When modifications to the strategy are made
approaching mandatory retirement
Well in advance of mandatory retirement dates
When a director is approaching mandatory retirement or
term limits
acquisition
Acquisitions bring directors
7 2011 Corporate Board of direCtors survey

9. 11. does your company develop a formal 13. How difficult is it to evaluate whether a
written document that outlines the skills, prospective board member will be a good
competencies, and experiences required choice (in terms of “chemistry,” experience,
for the next board member (“skills and and knowledge) for the company? (please
experience profile”)? (please check only one) check only one)
Percent Percent
yes 60 Extremely difficult 3
no 40 very difficult 17
Total Percentage 100 moderately difficult 51
Slightly difficult 22
not at all difficult 7
Yes
Total Percentage 100
No
Extremely
0 10 20 30 40 50 60 70 80 90 100 di erent
Percent
Very di erent
12. (if yes to q11) How different is the skills Moderately
di erent
and experiences profile for your next board
member from the skills and experiences Slightly di erent
profile of the outgoing director (please check
only one): Not at all
di erent
Percent 0 10 20 30 40 50 60
Extremely different 4 Percent
very different 21
14. is the present turnover of board members on
moderately different 46
u.s. Corporate Boards (please check only one)
Slightly different 20
not at all different 9 Percent
Total Percentage 100 much too low 8
low 47
about right 44
Extremely
di erent High 1
Very di erent much too high 0
Total Percentage 100
Moderately
di erent
Slightly di erent Much too low
Not at all Low
di erent
0 10 20 30 40 50 60 About right
Percent
High
Much too high
0 10 20 30 40 50 60
Percent
8 2011 Corporate Board of direCtors survey

10. C. Board suCCession planning 17. (if yes to q15) How often is board succession
planning discussed in formal board or
15. does your company engage in succession
committee meetings (please check only one):
planning for the board of directors? (please
check only one) Percent
Percent one meeting per year 24
yes 54 two meetings per year 36
no 46 more than two meetings per year 33
Total Percentage 100 Every few years 6
never 1
Total Percentage 100
Yes
No One meeting
per year
Two meetings
0 10 20 30 40 50 60 70 80 90 100 per year
Percent
More than two
meetings per year
16. (if yes to q15) Where is board succession
planning primarily discussed (please check Every few years
only one):
Never
Percent
0 5 10 15 20 25 30 35 40
meetings of the full board 21
Percent
meetings of the nominating and
governance committee 71
18. Which of the following statements best
informally among directors 4
summarizes your opinion of board succession
other (please specify) 4 planning (please check only one):
Total Percentage 100
Percent
it is an important best practice 66
Meetings of
the full board it is useful only when the board has critical directors
Meetings of whose loss would be very bad for the company 26
the nominating
and governance it is not useful at all 8
committee
Informally Total Percentage 100
among directors
Other 19. does your company have board members
(please specify)
with an expertise in Ceo succession planning
0 10 20 30 40 50 60 70 80 (i.e., they have led or have participated in
Percent three or more succession processes in the
past as a Ceo or director):
Percent
yes 66
no 34
Total Percentage 100
Yes
No
0 10 20 30 40 50 60 70 80 90 100
Percent
9 2011 Corporate Board of direCtors survey

11. 20. (if yes to q19) Which of the following directors
have expertise in succession planning (please Yes
check all that apply):
No
Number
chairman 79
0 10 20 30 40 50 60 70 80 90 100
lead director 48 Percent
chair of the nominating and Governance committee 69
director(s) other than these 93 23. What traits of active Ceos make them
attractive board candidates (please check all
Meetings of that apply):
the full board
Meetings of Percent
the nominating
and governance Strategic expertise 77
committee
Informally risk management expertise 45
among directors
operational expertise 74
Other
(please specify) Experience responding to a crisis or failure 43
0 10 20 30 40 50 60 70 80 leadership qualities 67
Percent Extensive personal and/or professional networks 46
other (please specify) 13
21. When recruiting for an open board seat, does
your company consider whether a candidate
has previous experience in Ceo succession Strategic
expertise
planning?
Risk manage-
ment expertise
Percent
Operational
yes 24 expertise
no 76 Experience
Total Percentage 100 responding…
Leadership
qualities
Yes Extensive
personal…
No Other
0 10 20 30 40 50 60 70 80
0 10 20 30 40 50 60 70 80 90 100
Percent
Percent
Selected other responses:
d. Ceos as Board MeMBers Current knowledge
22. are directors who are active Ceos better than Current industry knowledge
non-Ceo board members? Current issues, current issues experience
Percent External global market dynamics perspective
yes 21 ability to identify with the Ceo in terms of issues
no 79 They are currently “in the flow” of business issues
Total Percentage 100
They are currently experiencing some of the same problems
as our CEO
Retired CEOs bring considerable perspective but not the
immediacy of serving CEOs
10 2011 Corporate Board of direCtors survey

12. 24. What traits of active Ceos make them 26. are directors who are retired Ceos better
unattractive board candidates (please check all than average board members?
that apply):
Percent
Percent yes 46
too busy with their company to be effective directors 87 no 54
too interested in networking/promoting their Total Percentage 100
own company to be effective directors 21
too bossy/used to having their way 33
not good collaborators 28 Yes
other (please specify) 5
No
Too busy… 0 10 20 30 40 50 60 70 80 90 100
Percent
Too interested…
27. How many years before the experiences of
Too bossy…
a retired Ceo become outdated and are no
Not good longer valuable to current board service?
collaborators
Percent
Never
less than 3 years 10
0 20 40 60 80 100 more than 3 but less than 5 years 16
Percent
more than 5 but less than 10 years 20
Selected other responses: more than 10 years 16
Big ego cEo experience never becomes outdated 38
not good listeners Total Percentage 100
Too generous with compensation
Less than 3 years
25. are directors who are retired Ceos better
More than 3 but
board members than active Ceos? less than 5 years
More than 5 but
Percent less than 10 years
yes 55 More than
10 years
no 45
Total Percentage 100 CEO experience
never outdated
0 5 10 15 20 25 30 35 40
Percent
Yes
No
0 10 20 30 40 50 60 70 80 90 100
Percent
11 2011 Corporate Board of direCtors survey

13. 28. Can an ex-Ceo of a company that not a good fit as ability to assess risk may be deficient
experienced substantial accounting and Assuming the problems occurred during his/her tenure, there is
ethical problems be a good board member at a reputational risk that may affect his/her ability to perform well
another company? (please check only one)
If the issues arose on the CEO’s watch they should have had
Percent the processes in place to see the risks and correct before
they became problems for the company, the employees and
yes 37
shareholders
no 63
earnings experience may be a good teacher
Total Percentage 100
A good CEO learns why he missed the flaws, and does not
drop the ball twice, though be careful of flawed characters.
Yes As long as the CEO was not involved (aware of or acting in)
in personal egregious behavior and the CEO is able to openly
No speak to lessons learned so that Board can learn from his/her
experience. However, there may always be a question mark
around that person
0 10 20 30 40 50 60 70 80 90 100
I would say yes depending on the situation — if the CEO has
Percent
learned from the mistake, he/she could be very valuable
They may be a productive board member in a private company
29. please briefly explain your answer to q28
depending on their expertise in the segment or growth
initiatives that do not track culture
Selected other responses:
If the CEO recognized the deficiencies and tried to be
not a good fit due to credibility and ethical issues
transformational, then yes. But if the CEO accepted status
Directors need to be role models for ethical behavior quo, then no
Ethical problems are not caused by a lack of knowledge, they There either is or is not a culture of ethical behavior and
are caused by character flaws (and character doesn’t change) compliance or not. The CEO sets the tone. HOWEVER, there
are CEOs who have inherited problems they did not create and
I would have more problems with the ethical issues than the they should not be blanketed with the above statement
accounting ones, but both are problematic — he/she was in
charge. These problems may have strengthened the CEOs ability to
respond effectively and plan proactively
Although I think someone with this experience could be great,
the stigma and perception issues would prevent them from
being effective 30. Can a board member (not the Ceo) at a
May have difficulty establishing credibility/trust, however company that experienced substantial
depends on who caused them, but it does show a problem accounting and ethical problems be a good
managing and controlling information and risk board member at another company? (please
check only one)
Tone at the top is a key driver of corporate culture and the
CEO is the most influential person in setting tone at the top. Percent
Accounting and ethics issues at his / her company are usually
the result of problems with CEO performance. yes 67
no 33
not a good fit due to potential reputational and
judgment issues Total Percentage 100
Absolutely not. This concept smacks of ‘reward for bad
behavior’ thinking. Different if the CEO went in and reversed
the problems. Yes
The risk to the new organization is too difficult to assess
No
relative to the upside. Was it a failure in oversight, knowledge,
other? How does the board assess whether the CEO has
learned from the past problems adequately? How can the 0 10 20 30 40 50 60 70 80 90 100
board assess this? Percent
Reputation risk outweigh[s] the experience
12 2011 Corporate Board of direCtors survey

14. 31. please briefly explain your answer to q30 e. separating tHe CHairMan and
Ceo positions
Selected other responses:
32. does your company separate the Chairman
ok if not closely involved-is highly situation dependent and Ceo roles? (please check only one)
As long as they are not too closely associated with the scandal
Percent
and the perception is that this particular board member was
not complicit in the problems yes 68
Each circumstance can be different. A board member must no 32
rely on information supplied to him. You can question, but not Total Percentage 100
get honest answers
If this board member was part of the solution and not part of
the problem, (s)he might make an outstanding board member Yes
not a good fit due to potential reputational, judgment
and trust issues No
Although less strongly than the explanation to the preceding
0 10 20 30 40 50 60 70 80 90 100
question (we may think of mitigation factors such as the
behavior of the Board Member in trying to prevent or resolve Percent
the problem), there is also a potential reputational risk
involved… 33. (if yes to q32) How many years ago were the
If it is not the CEO or the CFO - possibly. Even then you have positions separated?
to decide if it is worth the reputational risk to the company
Percent
At the end of the day it is the Board that shareholders place
trust in and they must have and show understanding of the 1 6
company’s accounts 2 8
Most likely not since the level of the person being recruited to 3 11
the Board is C Suite and they are responsible for running the 4 8
Enterprise along with their peers and CEO
5 16
Yes, if they were brought in to solve the problem. no if they
6 to 10 24
were part of the problem. If they were part of ethical issues,
nEVER! >10 8
yes– experience is a good teacher always 19
Total Percentage 100
A good director learns why he missed the flaws, and does not
drop the ball twice, though be careful of flawed characters.
As long as the person was not the cause of the problem —
1
s/he must have high integrity and scrupulous ethics
Assuming the Board member was not involved in the 2
irregularities, he or she should have learned valuable lessons
from the experience 3
If the director was the person who uncovered the problems
and led the investigation, he/she could be a great board 4
member. In contrast, if he/she was there for a decade and
never dug into issues that ultimately proved problematical… 5
This truly depends on the situation. For example, if a new
6 to 10
board member was instrumental in discovering the problems,
then this board member is hugely valuable to others!
> 10
Always
0 5 10 15 20 25
Percent
13 2011 Corporate Board of direCtors survey

15. 34. (if yes to q32) What event or events caused 36. (if yes to q35) is this separation expected to
the separation of Ceo/Chairman positions? be permanent or temporary?
(please check all that apply)
Percent
Percent Permanent 95
Pressure from large shareholders 4 temporary 5
Proxy advisor (iSS or Glass-lewis) recommendation 4 Total Percentage 100
legislative action 2
Board members view this as a best practice 38
Yes
it has always been the case for our company 25
other 20
No
Pressure from 0 10 20 30 40 50 60 70 80 90 100
large shareholders
Percent
Proxy advisor (ISS
or Glass-Lewis)
recommendation
Legislative action f. lead independent direCtor
Board members
view this 37. does your company have a lead independent
as a best practice director?
It has always
been the case… Percent
Other yes 50
no 50
0 5 10 15 20 25 30 35 40 Total Percentage 100
Percent
Selected other responses:
Yes
Concern over leadership qualities of promoted CEO
Part of implementation of succession plan. needed No
transition period
Retirement of the previous CEO and hiring of a new first time 0 10 20 30 40 50 60 70 80 90 100
CEO who the board felt needed mentoring Percent
35. (if yes to q32) is the separation due to a Ceo
succession event?
Percent
yes 41
no 59
Total Percentage 100
Yes
No
0 10 20 30 40 50 60 70 80 90 100
Percent
14 2011 Corporate Board of direCtors survey

16. 38. (if yes to q37) How is the lead director 40. (if rotated to q38) How frequently is the lead
selected? director position rotated?
Percent Percent
chosen by the cEo or chairman 18 Every year 20
chosen by the nominating and Every 2 years 60
Governance committee 21 Every 3 years 0
Elected by independent directors 47 no set schedule 20
rotated among independent directors 7 Total Percentage 100
other reason 7
Total Percentage 100
Every year
Chosen by the Every 2 years
CEO or chairman
Chosen by Every 3 years
the Nominating
and Governance
Committee
No set schedule
Elected
by independent
directors 0 10 20 30 40 50 60
Rotated among Percent
independent
directors 41. (if yes to q37) is the lead independent director
at your company the senior-most outside
Other reason (nonexecutive) director?
0 10 20 30 40 50
Percent
Percent
yes 40
no 60
39. (if elected to q38) How frequently does the
lead director election occur? Total Percentage 100
Percent
Yes
Every year 43
Every 2 years 12 No
Every 3 years 12
0 10 20 30 40 50 60 70 80 90 100
no set schedule 33
Percent
Total Percentage 100
42. (if yes to q37) is the lead independent director
Every year at your company the most highly respected
nonexecutive director?
Every 2 years
Percent
Every 3 years yes 39
no 61
No set schedule
Total Percentage 100
0 10 20 30 40 50
Percent Yes
No
0 10 20 30 40 50 60 70 80 90 100
Percent
15 2011 Corporate Board of direCtors survey

17. 43. (if yes to q37) does the lead independent g. professional Board MeMBers
director have personality attributes (such as the
ability to build consensus) that specially equip In the following questions, we refer to a professional
this person to be effective in this position? board member as a director whose primary job is
to serve on boards (i.e., these individuals have prior
Percent executive experience, but currently they have no other
yes 86 full-time job than to sit on boards). Traditional board
no 14 members are individuals that either have a full-time job or
other professional interests. Most of their annual income
Total Percentage 100
is not derived from compensation for board positions.
Yes 46. do you have any professional directors on
your board?
No
Percent
yes 63
0 10 20 30 40 50 60 70 80 90 100
Percent no 37
Total Percentage 100
44. (if yes to q38) does the lead independent
director have prior board experience that is
more extensive than the average director? Yes
Percent No
yes 55
0 10 20 30 40 50 60 70 80 90 100
no 45
Percent
Total Percentage 100
47. are professional directors better than
Yes traditional board members?
Percent
No
yes 19
0 10 20 30 40 50 60 70 80 90 100 no 81
Percent Total Percentage 100
45. Which of the following statements best
summarizes your opinion of the lead Yes
independent director position in your
company (please check only one): No
Percent 0 10 20 30 40 50 60 70 80 90 100
it is an effective position that is a best practice 81 Percent
it is something that is done to simply satisfy
exchange listing requirements 7
it is something that is simply “window dressing”
for our shareholders 12
Total Percentage 100
Effective position
Exchange listing
requirements
Window dressing
0 20 40 60 80 100
Percent
16 2011 Corporate Board of direCtors survey

18. 48. What traits about professional board
members make them attractive board Too busy with
directorships
candidates (please check all that apply): Too interested
in networking/
Percent promoting
Lack
Experience with multiple companies 86 independence
diversity of background 62
No experience
Experience with successful companies 58
Experience with failed companies 36 Doing this
for the money
Experience managing a crisis 50
Too old
Extensive professional networks 40
Other
Experience
with multiple 0 10 20 30 40 50 60
companies
Percent
Diversity
of background
Experience
with successful
companies
H. Board oBservers
Experience with
failed companies In the following questions, we refer to a board observer
Experience as an individual who attends board meetings or
managing a crisis
committee meetings, but is neither a full-time board
Extensive profes- member nor a paid consultant.
sional networks
50. does your company have board observers?
0 20 40 60 80 100
Percent
Percent
yes 17
49. What traits of professional board members
make them unattractive board candidates no 83
(please check all that apply): Total Percentage 100
Percent
too busy with other directorships to be effective 56 Yes
too interested in networking/promoting their
No
own career to be effective 27
lack independence (because they rely on
director fees as primary income) 24 0 10 20 30 40 50 60 70 80 90 100
Percent
no current experience in executive position 31
they are simply doing this for the money 26
too old 16
other 10
17 2011 Corporate Board of direCtors survey

19. 51. (if yes to q50) How many board observers are
present in a typical meeting? Yes
Percent No
1 32
2 5 0 10 20 30 40 50 60 70 80 90 100
3 0 Percent
4 26
54. if yes to q53 do these positions rotate among
>4 37
internal managers of the company (e.g., a new
Total Percentage 100 person(s) every year or every other year)?
Percent
1 yes 23
no 77
2
Total Percentage 100
3
4 Yes
>4 No
0 5 10 15 20 25 30 35 40
0 10 20 30 40 50 60 70 80 90 100
Percent
Percent
52. (if yes to q50) How are board observers 55. (if yes to q50) are board observers ever
compensated for their services? (please check (please check all that apply)
all that apply)
Percent
Percent
investors 21
cash 12
customers 1
options or stock 4
Suppliers 0
they are not compensated 84
Employee representatives 18
Total Percentage 100
other 25
Cash
Investors
Options or stock
Customers
They are
not compensated Suppliers
0 20 40 60 80 100 Employee
Percent representatives
Other
53. (if yes to q50) do any of your board observers
include internal management employees 0 5 10 15 20 25
that have high potential to become senior Percent
executives within the company?
Percent
yes 52
no 48
Total Percentage 100
18 2011 Corporate Board of direCtors survey

20. 56. (if yes to q50) How are board observers
identified and sourced? (please check all Deeper company
knowledge
that apply):
Deeper industry
Percent knowledge
management recommendation 46 Deeper functional
knowledge
director recommendation 18
Scientific
recommendation by an investor 1 Knowledge
recommendation by a consultant 4 Regulatory
Knowledge
recommendation by an outside third party 0
Business
other 18 Relationships
Governmental
Relationships
Management
recommendation
Other
Director
recommendation
0 10 20 30 40 50 60 70 80
Recommendation
by an investor Percent
Recommendation
by a consultant
Recommendation 58. (if yes to q50) Which of the following are most
by an outside likely to have a board observer (please check all
third party
that apply):
Other
Percent
0 10 20 30 40 50 meeting of the full board 79
Percent meeting of the audit committee 39
meeting of the compensation committee 21
57. (if yes to q50) What value do board observers meeting of the nominating and governance committee 11
add to the company? (please check all that
meeting of a specialized committee
apply):
(such as finance, risk, technology, etc.) 14
Percent
deeper company knowledge 61 Meeting of
the full board
deeper industry knowledge 29
Meeting of the
deeper functional knowledge 29 audit committee
Scientific Knowledge 4 Compensation
committee
regulatory Knowledge 21
Nominating
Business relationships 25 and governance
committee
Governmental relationships 4 Specialized
other 11 committee
0 10 20 30 40 50 60 70 80
Percent
19 2011 Corporate Board of direCtors survey

21. 59. (if yes to q50) does the presence of a board 60. (if yes to q50) Has a board observer ever been
observer influence the discussion or level of added to the board as a full voting member?
candor in the formal boardroom?
Percent
Percent yes 17
yes 17 no 83
no 83 Total Percentage 100
Total Percentage 100
Yes
Yes
No
No
0 10 20 30 40 50 60 70 80 90 100
0 10 20 30 40 50 60 70 80 90 100 Percent
Percent
20 2011 Corporate Board of direCtors survey

22. a b o u t S ta n f o r d u n i v e r S i t y ’ S r o c k
c e n t e r f o r c o r p o r at e G o v e r n a n c e a n d
Heidrick & StruGGleS
about stanford university’s rock Center for about Heidrick & struggles
Corporate governance
Heidrick & Struggles International, Inc., (nasdaq:HSII)
The Arthur and Toni Rembe Rock Center for Corporate is the leadership advisory firm providing executive
Governance is a joint initiative of Stanford law School search and leadership consulting services, including
and the Stanford Graduate School of Business, created succession planning, executive assessment, talent
with the idea that advances in the understanding and retention management, executive development, transition
practice of corporate governance are most likely to consulting for newly appointed executives, and M&A
occur in a cross-disciplinary environment where leading human capital integration consulting. For almost 60
academics, business leaders, policy makers, practitioners years, we have focused on quality service and built
and regulators can meet and work together. The Rock strong leadership teams through our relationships with
Center’s goal is to conduct research and tap this wealth clients and individuals worldwide. Today, Heidrick &
of expertise to advance the practice and study of Struggles leadership experts operate from principal
corporate governance. The Rock Center works closely business centers globally. . For more information about
with the Corporate Governance Research Program. Heidrick & Struggles, please visit www.heidrick.com.
21 2011 Corporate Board of direCtors survey

23. david f. larCker
James Irvin Miller Professor of Accounting; Director of the Corporate Governance Research
Program; Senior Faculty, Arthur and Toni Rembe Rock Center for Corporate Governance at
Stanford University; Codirector of the Directors’ Consortium Executive Program
Website http://www.gsb.stanford.edu/cgrp
Phone (650) 725-6159
Email larcker_david@gsb.stanford.edu
Professor larcker’s research focuses on executive compensation, corporate governance, and
managerial accounting. His work examines the choice of performance measures and compensation
contracts in organizations. He has current research projects on the valuation implications of
corporate governance, role of the business press in the debate on executive compensation, and
modeling the cost of executive stock options.
Professor larcker presently holds the James Irvin Miller Professorship. He is the director of the
Corporate Governance Research Program at the Stanford Graduate School of Business and
senior faculty of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford
University.
He recently co-authored the book Corporate Governance Matters: A Closer Look at
Organizational Choices and Their Consequences, published by FT Press-Pearson Prentice
Hall in April, 2011. He has also authored numerous academic research papers, case studies,
corporate governance closer look studies, and articles for the popular press including Do You
Have A Plan For Finding Your Next CEO? The Corporate Board September/October 2010 with
Stephen Miles of Heidrick & Struggles.
Dave’s research has been often cited by the WSJ, BloombergBusinessWeek, FT, Forbes, NY
Times, Agenda, NACD Directorship, Corporate Board Member, SHRM and Corporate Secretary
Magazine among others.
Professor larcker was previously the Ernst & Young Professor of accounting at the Wharton
School of the University of Pennsylvania and Professor of accounting and information systems at
the Kellogg Graduate School of Management at northwestern University. He received his PhD
in Business from the University of Kansas and his BS and MS in Engineering from the University
of Missouri- Rolla.
He is on the editorial boards of the Journal of Accounting and Economics, Journal of Accounting
Research, Accounting, Organizations and Society, Journal of Accounting and Public Policy,
Journal of Applied Corporate Finance. Professor larcker received the notable Contribution to
Managerial Accounting Research in 2001. He is also a trustee of the Wells Fargo Advantage Funds.
22 2011 Corporate Board of direCtors survey