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With the exception of serving as a justice of the United States Supreme Court, there are few employment opportunities where a person might hold a position or title for life. Interestingly, however, and with increasing frequency, there is an apparent trend for corporate directors to enjoy a form of this employment immortality by being anointed "directors for life." A director with this privilege is referred to as "director emeritus." The emeritus designation is not without precedent. In fact, the term is commonly used in the academic community and occasionally found in not-for-profit organizations, The prevalence of the emeritus designation has, however, only recently gained prominence in corporate boardrooms.
An emeritus designation typically signifies one's passage into retirement. For example, a professor who has served a university with distinction for many years may have the title "professor emeritus" bestowed following his or her retirement. Individuals who have distinguished themselves in their leadership of notfor-profit organizations, too, might receive this distinction - as in "CEO emeritus" of the Red Cross. The common element in both examples is that an individual served in a position of high rank, presumably with distinction, and retired in good standing. It should also be noted that these examples represent honorary titles that usually confer no special privileges upon the honoree and do not convey continued decision-making authority.
If emeritus titles for retiring board members had this character, they would be of little consequence and of no concern to the corporate governance community (e.g. institutional investors, the SEC, NYSE, NASDAQ, Conference Board, Institutional Shareholder Services, Investor Responsibility Research Center). A review of recent proxy materials, however, clearly suggests that: (1) corporate emeritus titles have little in common with their non-profit counterparts; and (2) there is little consistency even in the corporate environment regarding the use of the emeritus title, its guidelines,...