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More than 1 / 4 of board members at European financial services corporations hold no less than 4 such positions throughout totally different organisations, elevating considerations about their capability to hold out their roles successfully.
The information, half of broader analysis together with interviews with fund managers launched on Monday by EY, additionally confirmed that more work is required on gender illustration to satisfy a forthcoming EU directive.
“When you’re attempting to create more diversity of skills, having the same person appearing multiple times and being brought on to different boards works against that,” mentioned Tara Cemlyn-Jones, chief government of non-profit 25×25, which goals to enhance feminine illustration in senior government roles.
The quantity of administrators with a number of board positions assorted between sectors. Close to half of board members at asset administration companies held more than two positions.
But even amongst banks the quantity was about 40 per cent, regardless of a perception amongst headhunters that board administrators at lenders keep away from so-called “overboarding” as a result of of governance dangers.
The EY information covers all organisations. Usually such datasets solely cowl public corporations, despite the fact that roles with personal corporations, charities and public establishments are sometimes simply as demanding and could be missed.
Of the 300 fund managers surveyed by EY, more than 80 per cent mentioned they believed that holding more than three board positions may have an effect on administrators’ skills to satisfy their obligation.
Chairs at financial services corporations “spoke of concerns that the prestige of a board seat could affect willingness to challenge the status quo”, mentioned Omar Ali, EY’s financial services managing associate for Europe, the Middle East, India and Africa, “and that some board members might be financially dependent on their board positions, which impacts their independence”.
Renée Adams, professor of finance at Saïd Business School, mentioned that more analysis was essential to know the problem of overboarding.
(*4*) she mentioned.
The analysis additionally discovered that just about 30 per cent of European financial boards had lower than 40 per cent feminine illustration. Under a European Commission directive attributable to enter power in July 2026, giant listed corporations throughout the EU must attain that 40 per cent stage amongst non-executive administrators, or 33 per cent throughout all administrators.
Failure to satisfy the necessities may result in a board being annulled, with a number of EU nations together with Germany, Spain and Italy already having such necessities in place.
In the UK, the Financial Conduct Authority has required listed corporations to supply details about how they’re performing towards targets that embody having 40 per cent feminine board illustration since final April.
Cemlyn-Jones mentioned that guaranteeing that more ladies had been in senior roles was even more vital than bettering their illustration on boards.
“Without that, you can have a fabulous board and still have terrible groupthink at executive levels,” she cautioned. “You won’t close the pay gap until you get that representation at that level.”
Additional reporting Anjli Raval