The composition of the board of directors at major companies is changing and becoming less clubby. On "Squawk Box" CNBC's Mary Thompson says there’s no shortage of candidates to serve on corporate boards, but they’re now drawn from a different talent pool.
In 2001, about half board members were active CEOs. Last year, the figure declined to 29%.
Harvard Business School’s Jay Lorsch says, “It’s not financial risk – it’s risk to reputation. I think there are probably some people who are walking away from it.”
Boards of directors are now getting more retired people, more senior executives who didn’t serve as CEOs and people from other careers.
New SEC rules and Sarbanes-Oxley require disclosure of executive pay and that means the board of directors at a company often spend more time on compliance and less on strategy.
But the goal of the board remains the same: A stronger, more competitive company.