3.4.1 Introduction on composition of boards

Some US corporate governance practices will now be described in the following chapters. First, the composition of US boards (section 3.4), second, the division of the roles of US board members (section 3.5) and finally, the duties and liabilities of US board members (sections 3.6 and 3.7).

I start with topics conceming the composition of the board, first the tradition of the one-tier board, the primacy of the board gradually assuming elements of a two-tier board (3.4.2); second, the evolution of boards over the last 30 years (3.4.3); third, the composition of an average board (3.4.4); and the practice that most officers who are not on the board do attend board meetings (3.4.5); as well as the emphasis on counterbalance provided by independent directors on the board and committees (3.4.6); and executive sessions special to the US, which are meetings of independent directors, without executives (3.4.7); the size of the board that should not be too large (3.4.8); the desire that independent directors should be in a strong majority on the board and be the sole members of board committees, plus qualitative requirements for independent directors (3.4.9); a description of the views on term of office of directors (3.4.10); the formal documentation of responsibilities (3.4.11); and fmally a summary (3.4.12).

This section 3.4 on the composition of US boards is followed by sections on the roles of various types of director (section 3.5), including the foor most salient points of US best practice, (i) an active role of independent directors in challenging the strategy plans of management and debating alternatives and in establishing an orderly succession of directors and especially of the succession of the CEO, (ii) the important roles of the separate non-CEO chairman or lead director, (iii) further remarks about the executive sessions and (iv) the best practices to ensure optimal performance of these roles.