Cooley just released its first “Post-IPO Governance Trends Report,” an in-depth look at how newly public companies structure their governance profiles in the years following their initial public offerings (IPOs). Drawing on a robust dataset of companies that went public between 2017 and 2021, the report provides a detailed window into the boardroom and governance decisions that companies make as they transition from private to public life – often under intense scrutiny and evolving market expectations.
Why does this matter? For one thing, as we approach proxy season, companies (and those who advise them) are once again revisiting their governance practices – classified boards, dual-class structures, committee makeup, director refreshment, shareholder engagement practices and more. There are hundreds of companies that went public during the historic IPO boom covered by this report that are now looking around, four to nine years after IPO, and asking, “What’s next for us as a public company? What have our peers done so far?” This report aims to answer those questions.
One of the most notable findings in the report: Classified boards continue to dominate in the post-IPO period, with nearly 90% of the surveyed companies maintaining classified structures since the time of their IPOs. For companies just going public, particularly in tech and life sciences, classified boards have long been viewed as stabilizing mechanisms during the early years when companies are still operating at hyper-speed. The data suggest that many companies continue to view the structure as strategically protective even as governance norms evolve. While this report details high levels of stickiness for a number of “defensive” governance structures, it also shows significant governance evolution in other areas, such as board and leadership teams.
The report sheds light on trends in key areas, such as:
- Board composition and director expertise – including the increasing prevalence of directors with operational, financial and industry-specific experience.
- Proxy statement disclosures – including the ways in which recently public companies use proxy disclosures to signal responsiveness to investor concerns.
- Committee structures and oversight priorities – particularly compensation and audit committees navigating heightened regulatory and investor expectations.
- Shareholder rights and control mechanisms – such as multi-class structures and supermajority voting provisions, which remain common among newly public companies.
- Compensation and equity practices – including how select compensation practices shift as companies mature.
- Annual meeting voting – particularly the frequency with which newly public companies face shareholder proposals and director election difficulties.
Much of the public conversation around governance focuses on mature issuers, but the early post-IPO years are often the most dynamic and least understood. This report helps fill that gap by identifying not only what companies are doing, but when and why certain governance transitions occur.
If you are a public company, or soon-to-be public company, the report provides a helpful benchmark for evaluating how post-IPO governance norms have evolved and what steps companies may want to consider as expectations (and investor demands) continue to shift.
The full report also includes detailed charts, data visualizations and breakdowns by industry, company size and governance features. You can access it on IPO GO, Cooley’s interactive resource for navigating an IPO and the post-IPO life cycle.
