Spencer Stuart releases the results of its 2009 UK Board Index
14 December 2009
- Senior independent director pay increased by almost 13 per cent, with average basic non-executive director’s fees up eight per cent
- For the second successive year fewer companies have one or more woman non-executive director — 63 per cent, down from 72.6 per cent in 2007
LONDON, 14 December, 2009— Spencer Stuart today releases its 2009 UK Board Index, providing a comprehensive insight into the changing trends and issues in UK Board rooms over the last year. The Index findings, from the 150 largest companies by market value, have highlighted two key areas of change:
- Remuneration - Average remuneration for senior independent directors increased by almost 13 per cent this year and average basic non-executive director’s fee is £54,000, up eight per cent. Remuneration of chairmen, however, has decreased approximately 4 per cent along with a decrease in the number of chairmen being paid more than £1 million from 7 to 5 (all of whom are full-time).
- Board Composition - Women now represent 9.9 per cent of the total number of directors, down from 10.5 per cent last year, and only 10 per cent of companies surveyed have one or more women executive directors. For the second consecutive year, the percentage of companies which have at least one woman non-executive has fallen, to 63 per cent in 2009 from 67.3 per cent in 2008 and 72.6% in 2007. There are currently one woman chairman and three women chief executives at the companies included.
Will Dawkins, head of the Spencer Stuart UK Board Services Practice, said: "The evolution in the composition of UK boards over the past year is revealing. The drop in the number of boards with female directors may be temporary, yet it is a salutary reminder of the need to maintain diversity of composition and outlook in the boardroom. In the past year, the tenure of chairmen and chief executives have converged, so that they now serve roughly the same amount of time (more than 5 ½ years). This trend highlights the importance of orderly succession planning, avoiding a situation where the two key leadership roles in the company come up for re-appointment at the same time. The rise in non-executive remuneration is a healthy reflection of the increasing demands placed on the role of independent director."
In addition to the areas outlined above there were a number of other findings from this year’s survey, including:
- Board Evaluations – Two thirds of companies in the last year conducted a board evaluation using only internal resources, just over thirteen percent used external consultants only and 16 per cent used a combination of the two, down from 27 per cent last year.
- Tenure – Full-time chairmen have an average tenure of 9.6 years compared with 5.6 years for part-time chairmen. The average tenure of both chairman and chief executive has risen, with the average chairmen’s tenure increasing from 4.2 years to 5 years and chief executives’ length of service increasing to 5.9 years from 5.2.
- Risk Committees – The percentage of companies with a risk-focused committee remains low, but has increased from 4 per cent last year to 6.7 per cent this year.
For further details and findings from the 2009 Spencer Stuart UK Board Index please visit the company’s web site at www.spencerstuart.com.
NOTES TO EDITORS
About the Spencer Stuart Board Index
The Spencer Stuart UK Board Index covers 150 of the largest companies by market value at the end of April 2009, excluding investment trusts. It examines trends in board governance, composition and director remuneration.
About Spencer Stuart
Spencer Stuart is one of the world’s leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients — ranging from major multinationals to emerging companies to non-profit organisations — and address their leadership requirements. Through 51 offices in 27 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. For more information on Spencer Stuart, please visit www.spencerstuart.com.