Our client, Spencer Stuart, is a strategic consulting firm that offers leadership and business consulting services to organizational decision makers. Our study aims to assess S&P 500 company performance based on board member team composition. The team composition for each board includes features such as board industry experience, board female ratio, and board turnover rate. Company performance is measured in terms of Total Shareholder Return (TSR), which is an annualized percentage that combines share price appreciation and dividends paid. Utilizing a hierarchical linear regression model, we examined engineered features and found that median time-in-role of board members and the change of chairmen/women’s lagging effect of one and two years have the most significant effect. Both of these features have positive associations with the company’s TSR while a board’s industry experience and the diversity in board industry experience are not significant under our model.
Additional team members: