2021 Corporate Governance Practices: A Comparison of Large Public Companies and Silicon Valley Companies

David A. Bell is partner and Ron C. Llewellyn is counsel at Fenwick & West LLP. This post is based on their Fenwick memorandum.

Corporate governance practices vary significantly among public companies. This reflects many factors, including:

  • Differences in their stage of development, including the relative importance placed on various business objectives (for example, focus on growth and scaling operations may be given more importance);
  • Differences in the investor base for different types of companies;
  • Differences in expectations of board members and advisors to companies and their boards, which can vary by a company’s size, age, stage of development, geography, industry and other factors; and
  • The reality that corporate governance practices that are appropriate for large, established public companies can be meaningfully different from those for newer, smaller companies.

Since the passage of the Sarbanes-Oxley Act of 2002, which signaled the initial wave of corporate governance reforms among public companies, each year Fenwick has surveyed the corporate governance practices of the companies included in the Standard & Poor’s 100 Index (S&P 100) and the technology and life sciences companies included in the Fenwick – Bloomberg Law Silicon Valley 150 List (SV 150). [1]

Significant Findings

Most of the governance practices and trends from previous years continued in the 2021 proxy season. Notable developments include an increase in gender diversity in both the SV 150 and S&P 100. We also saw changes in other key areas, including dual-class voting structure, board classification and majority voting.

Comparative data is presented for the S&P 100 companies and for the high technology and life science companies included in the SV 150, as well as trend information over the history of the survey. In a number of instances, we also present data showing comparison of the top 15, top 50, middle 50 and bottom 50 companies of the SV 150 (in terms of revenue), [2] illustrating the impact of company size or scale on the relevant governance practices.

Observations for 2021 include:

Board Diversity

  • The percentage of women board members is now essentially identical for the SV 150 and S&P 100, closing the gap between smaller technology companies and their larger public company counterparts in the S&P 100.
  • The percentage of women serving on boards of SV 150 companies significantly increased to 30.2% in 2021 from 25.7% in 2020.
  • The percentage of women serving on boards of S&P 100 companies was 30.3%, increasing from 28.7% in 2020.
  • All companies in the SV 150 now have at least one woman director, continuing the long-term trend in the SV 150 of increasing numbers of women directors and declining numbers of boards without women members.
  • The rate of increase in women directors for the SV 150 continues to be higher than among S&P 100 companies.

Dual-Class Voting Stock Structure

  • Adoption of dual-class voting stock structures has emerged as a recent clear trend among Silicon Valley technology companies—including among those that have grown to be among the mid-to-larger SV 150 companies—though it is still a small percentage of companies.
  • Throughout the past decade, the SV 150 saw a sharp increase in the frequency of dual-class voting structures (from 2.9% in 2011 to 21.3% in 2021).
  • This rate has easily surpassed the S&P 100 (which slightly decreased from 9.0% in 2011 to 8.0% in 2021).

Classified Boards

  • Classified boards remain significantly more common among technology and life sciences companies in the SV 150 than S&P 100 companies. Their use has steadily increased in the SV 150 (from 44.3% in 2015 to 52.1% in the 2021 proxy season). Companies in the middle 50 and bottom 50 of the SV 150 were more likely to have classified boards than the larger SV 150 companies, although the middle 50 companies saw a significant decline from 70% in 2020 to 49% in 2021 (though this was largely offset by increases among the top and bottom 50).

Majority Voting

  • Over the long term, many companies have implemented some form of majority voting among both the S&P 100 and SV 150, though the rate of adoption has largely stabilized in recent years with prevalence far higher among the S&P 100.
  • The increase has been particularly dramatic among S&P 100 companies, rising from 10% to 96% between the 2004 and 2021 proxy seasons.
  • Among the technology and life sciences companies in the SV 150, the rate has risen from zero in the 2005 proxy season to 56.3% in the 2021 proxy season.

Board Chairs

  • SV 150 companies are less likely to have a combined chair/CEO than S&P 100 companies, with 38.2% and 58.6% having combined the roles, respectively.
  • Between 2004 and 2021, the percentage of board chairs who are insiders has declined for both groups.

Fees Paid to Auditors

  • We compared the audit fees paid in 2020 by SV 150 and S&P 100 companies. The data show that companies in the SV 150 paid on average a fraction of the audit fees paid by companies in the S&P 100, with SV 150 companies paying on average $5.2 million compared to $23.3 million paid by S&P 100 companies.
  • Year over year, average audit fees have increased in the SV 150. In the SV 150, companies disclosed in the 2021 proxy season that they paid on average $5.2 million in 2020, compared to $4.7 million in 2019, up by 10.6%. S&P 100 companies paid on average $23.3 million in 2020, compared to $23.5 million in 2019, representing a .85% decrease. In the S&P 100, audit fees ranged from a minimum of $3.1 million to a maximum of $75.1 million.

The complete survey is available here.


1The S&P 100 is a cross‑section of companies across industries but is not a cross‑section of companies across all size ranges (it represents the largest companies in the United States). While the SV 150 is made up of the largest public companies in Silicon Valley by one measure—revenue, it is actually a fairly broad cross‑section of companies by size but is limited to the technology and life science companies based in Silicon Valley. Compared to the S&P 100, SV 150 companies are generally much smaller and younger, and have lower revenue. The 2021 constituent companies of the SV 150 range from Apple and Alphabet with revenue of approximate ly $294B and $182B, respectively, to Ultragenyx Pharmaceutical and iRhythm Technologies, with revenue of approximately $271M and $265M, respectively in each case for the four quarters ended on or about December 31, 2020. Apple went public in 1980, Alphabet (as Google) in 2004. Apple and Alphabet’s peers clearly include companies in the S&P 100, of which they are also constituent members (13 companies were constituents of both indices for the survey in the 2021 proxy season), where market capitalization averages approximately $561B. Ultragenyx Pharmaceutical and iRhythm Technologies’ peers are smaller technology and life sciences companies that went public relatively recently and have market capitalizations well under $1B. In terms of number of employees, the SV 150 averages approximately 14,900 employees, ranging from SYNNEX with 280,000 employees spread around the world in dozens of countries, to companies such as Corcept Therapeutics, with 236 employees in the U.S., as of the end of their respective fiscal years 2020 (Innoviva, ranked 140 in the SV 150, has the fewest full-time employees—five).(go back)

2The top 15, top 50, middle 50 and bottom 50 companies of the SV 150 include companies with revenue in the following respective ranges: $21.3B or more, at least approximately $2.7B or more, at least approximately $762M but less than approximately $2.6B, and at least approximately $265M but less than $694M. The respective average market capitalizations of these groups are $424.7B, $171.7B, $15.8B and $8.1B.(go back)

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