VIEWPOINT: BOARD COMPOSITION TRENDS IN EUROPE
June 2022 Edition - Written by Lesley Stephenson
As part of their long-standing study of trends in board composition in companies around the world, Heidrick & Struggles have recently published the latest edition of their Board Monitor Europe report.
According to their research, boards continued to seek out directors with CEO and CFO experience. Across the region, just under half of the seats, 44 per cent, were filled with directors who had held those roles. It’s notable, however, that among the group of countries included both last year and this year, that figure is consistent: that is, boards in 2020 weren’t seeking even more of this kind of experience than before.
Boards in 2020 were also often seeking directors who could hit the ground running—59 per cent of seats were filled by people with prior board experience. That figure reached a high of 85 per cent in the Netherlands, while the lowest share was in Italy, at 30 per cent.
That said, this figure is a bit lower than in prior years, while the share of active (rather than retired) executives rose slightly, to just over half from a bit under half. Taken together, these shifts suggest that boards in 2020 had some additional preference for new directors with current executive experience.
In the context of responding to the pandemic and a greater focus on socially meaningful purpose at many companies around the world, it is also notable that, among boards in countries included in last year’s report, the share of seats filled by directors with sustainability experience rose marginally, by 5 per cent to 15 per cent.
European boards are also facing increasing pressure to add new directors from countries where they do business. This year, similar to last year, 40 per cent of seats were filled by directors who were nationals of countries other than that where the company is headquartered. But that isn’t yet leading to particularly significant differences in perspective: among the non-nationals, 58 per cent came from other countries in Europe.
The full Board Monitor Europe report can be found here.