Results of ACSI research on ASX 100 board composition and NED pay
25/10/2011
mail.png

ACSI has released its tenth annual research paper on ASX100 boards, reviewing board composition, director independence, gender balance, director remuneration, director tenure and director age profile. 

There were 88 boards in the sample, with 598 individuals holding a total of 728 board seats.

Fewer directors are holding more than one board seat, reinforcing the impression that workload pressures have been increasing.  More women have been appointed to boards.  While most non-executive directors appointments (NEDs) are new to ASX100 board roles, the average age of board members is increasing, indicating that there is not a lot of succession planning for forthcoming generation changes.  Average board fees increased in line with inflation, although the results of the study imply that annual increases are still not the norm.

The main points of the study are summarised below.

Board structure

·          There was an average of 8.3 directors per board in the 2010 sample (compared with 8.5 in 2009 and 8.8 in 2008)

·          25% of all sample boards had 8 members (the most common board size)

·          ASX100 boards continued to have a majority of non-executive directors in 2010, with NEDs holding 83.7% of all board seats (up from 82.9% in 2009)

·          70.3% of all board seats were held by independent NEDs

·          71 of the 88 sample boards had a board that was majority independent under the ACSI guidelines’ criteria

·          16 of the 88 sample boards did not have an independent chairperson

·          31 of the 88 sample boards did not meet the ACSI guidelines recommendation for the composition of the audit committee and 13 did not meet the guidelines for the remuneration committee (including 4 combined remuneration and nomination committees)

·          Executive directors held fewer than 20% of board seats on more than 75% of all the ASX100 sample boards

 

Pay

·          The median non-executive director fee increased 1.01% to $193,000 and the average fee increased 4% to $208,141 (after increasing 3.6% in 2009)

·          The median chairperson fee fell 2.1% to $404,375 while the average chairperson fee fell 3.3% to $431,233 (several boards paying very high chair fees were excluded from the survey in 2010 because the incumbent retired during the year; the median and average would have been almost unchanged from 2009 if these had been included at the full year chairperson fee)

·          The median pay for the 63 non-executive director positions held by females was $208,531 and the average $224,361, reflecting the fact that the female directors are concentrated among the larger, and higher paying, boards

Tenure and age

 

·          Median tenure for a non-executive director increased from 4.5 years to 5 years in 2010 and average tenure was unchanged at 5.8 years (the average falls to 5.3 years excluding the 16 NEDs who had been in office for 20 years or more)

·          The average age for non-executive directors is now 60.8 years (61.8 years for men and 55 years for females)

Gender

·          The proportion of ASX100 directorships (executive and non-executive) held by women increased from 12.1% to 13.5%, with 12.2% (73) of the 598 individual directors in the study being female (4 of the 119 executive directorships in the sample were held by women)

·          23.9% of the ASX100 boards had no female directors in 2010 (down from 29.4% in 2009) (another 2 have since appointed a female director)

·          In 2010, there were a total of 86 new board appointments among the sample ASX100 boards, 76 of which were non-executive and 10 executive directors

·          51 of the 76 new NED appointments were filled by 50 people who had not previously held an ASX100 directorship (one was appointed to 2 director positions)

·          Women comprised 26% of the NED newcomers and 10% of the executive director newcomers

·          40% of the incumbent ASX100 NEDs who were appointed to a new ASX100 NED role in 2010 were women, indicating the proportion of boards seeking to recruit women to their boards from within the existing ASX100 director pool

Multiple directorships

 

·          Of the 598 individuals in the sample:

– 343 (57.4 percent) held only one directorship across all ASX listed boards

– 161 (26.9 percent) held two

– 60 (10 percent) held three

– 24 (4 percent) held four, and

– 10 (1.7 percent) held five

·          Of the 75 individuals appointed to ASX100 NED roles in 2010, 50 (67%) held no other ASX100 directorship (up from the 52.2% in 2009 and 50.6% in 2008 who were newcomers to the ASX100 director pool)

·          74% of the female directors held one board role in the 2010 ASX100 sample (up from 70.3% in 2009) and 53.4% held no other director role among all ASX listed boards (46.9% in 2009)

·          Of the 525 men in the ASX100 sample, 83.6% held no other board roles at ASX100 boards and 57.9% held no other board roles at ASX listed boards (55.8% in 2009)

·          6 women in the sample (8.2%) held 3 ASX100 board roles and 9.6% held 3 ASX listed board roles

·          No woman held more than 3 ASX100 board roles, but 5.5% held 4 directorships across all ASX listed boards and 1 woman held 5 directorships across ASX listed boards

·          1 man held 4 ASX100 board roles while another 19 held 4 board roles across all ASX listed boards

·          9 men held 5 ASX listed entity directorships

The ACSI paper can be found HERE

© Guerdon Associates 2021
read more Back to all articles