New York (Feb. 10, 2004) -- Boards of directors of large, multinational European companies lag their U.S. counterparts in increasing their corporate governance efforts in the wake of corporate scandals, according to a survey by PricewaterhouseCoopers.
Less than one-third (32 percent) of European boards spent more time and effort on corporate governance in 2003 than the previous year, compared with 62 percent of U.S. boards, according to PwC’s Management Barometer. PwC surveyed 138 CFOs and managing directors of Europe-based multinationals and 177 of their peers in the U.S. during the third quarter of 2003. A majority of European boards (54 percent) expended about the same amount of time and effort, while 1 percent spent less time.
Regardless of their level of time and effort, 20 percent of boards in both Europe and the U.S. received an increase in total compensation over the past year. Looking ahead, 11 percent of companies in Europe and 10 percent of companies in the U.S. plan to increase board member compensation over the next 12 months, PwC reported. Increases granted to board members averaged 16.6 percent for Europeans receiving a raise, versus 17.9 percent for U.S. directors. Average increases for directors' compensation over the next 12 months are expected to be 10.4 percent in Europe and 10 percent in the U.S.
Forty-four percent of European audit committees increased their time and effort over the past year, compared with 68 percent in the U.S. Only 12 percent of European audit committees received raises over the past year, compared with 22 percent for U.S. audit committees. The average raise for European audit committees was 14 percent, compared with a 26.2 percent for their U.S. counterparts.
Just 7 percent of respondents in Europe and 1 percent in the U.S. said they had problems retaining their most valuable directors over the past year, while 81 percent reported no difficulties. Likewise, only 17 percent of Europeans and 18 percent in the U.S. reported any difficulty recruiting new board members. Twenty-eight percent of Europeans noted they didn't need to recruit new directors.
-- WebCPA staff
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