Campbell Soup's guidelines set forth the criteria used in the evaluation, stating that the directors are to be evaluated annually as to independence and integrity, knowledge and expertise, stature, accountability, decisiveness, participation and input, preparation, availability and teamwork. Many guidelines limit the age beyond which directors may serve, either by imposing mandatory retirement or by prohibiting re-election after a certain age. The age limit ranges from 65 to 70. Some, such as Hewlett-Packard, permit exceptions if approved by the board. Some are silent on the issue, while some affirmatively state that there is no age limit.
Few guidelines establish term limits.
While term limits could help insure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of Directors who have been able to develop, over a period of time, increasing insight into the company and its operations and, therefore, provide an increasing contribution to the Board as a whole. GM and others refer to the director evaluation process as an alternative to term limits. One company has a term limit of three full three-year terms but permits the board to consider exceptions upon committee recommendation. Four guidelines are silent on the issue. Several of the guidelines reflect the institutional investor position that director compensation should be linked with corporate performance.