As well as improving diversity, more than one-fifth of boards seats in Ireland allocated to directors with experience in sustainability.
Irish businesses are bulking up sustainability expertise on their boards.
That’s according to new research from executive search and leadership advisory Heidrick & Struggles, which found an increase in board appointments from 500 to 573 across European markets, with Ireland’s listed companies ranked amongst the top five markets in overall new appointments.
“With 42% of these appointments being female, it shows deliberate progress made towards improving diversity and inclusion within public company leadership”
Compared with countries in North America or Asia, European companies have long paid more attention to many social and environmental considerations. ESG is a core business pillar and increasingly instrumental in corporate access to capital, which is a very effective method of attracting the attention of leaders and boards.
Getting serious about sustainability
Heidrick & Struggles report finds that this trend has not been reflected in the board appointments over the past twelve months. Over one-fifth of the board seats in Ireland were allocated to directors with experience in sustainability – 22% of directors appointed had experience in the field of sustainability – but overall, this remained unchanged. Overall, Europe saw an increased share of seats going to directors with experience in digital and financial risk & compliance experience.
The report found an increase in board appointments across Europe when compared to the 2020 report – rising from 500 to 573 new appointments in the period. Against the backdrop of volatility and uncertainty, it is clear from the findings that boards across the region are working to ensure continued business preparedness for the scale and breadth of challenges ahead.
Overall, the report found that France (1.9), Portugal (1.8) and Norway (1.6) led the way in appointments with Ireland following closely with an annual ratio of 1.5 appointments on the Heidrick & Struggles index. This ratio represents the proportion of appointments compared to the number of companies listed in each market’s public company listings, with Ireland’s figure representing 45 board appointments in Ireland in the period tracked for 2021.
Although it is notable that Ireland is among the top tier for appointments, it’s interesting to find that Ireland had the lowest share of seats going to active directors (38%), as opposed to retired. This is in comparison with France and Norway, who led the way with the largest share of seats going to active directors with 80% and 79% of appointments respectively.
Ireland bucks trend on diversity
It is clear that many public companies have begun to prepare to meet upcoming EU legislation, which outlines minimum requirements for gender representation across public boards. Against this backdrop, the report found that 42% of new appointments in Ireland were females, with companies ensuring they remain ahead of stakeholder demand and the minimum EU-set threshold, which is to be fully introduced by 2030.
Due to the lack of historical data tracking on the gender balance of new appointments in Ireland, we are unable to compare the trends over the past four years, so it will be interesting to see comparisons in next year’s report.
Outside of Ireland, progress on diversity of appointees seems to be stalling across Europe with the overall share of seats going to women declining slightly from 45% to 43%, but these averages vary significantly from country to country. For example, in 2021, 66% of Spain’s new appointments were female, while only 33% of appointments in Belgium were female.
In terms of diversity of nationality across public company boards in the 13 markets tracked, 56% of the new director seats in 2021 went to national and 34% to nonnational executives across Europe – referring to the directors’ place of origin.
Ireland reported 33% of their board seats went to non-national European individuals, 51% of appointees were Irish nationals, and 16% were non-nationals from outside of Europe. Finally on this point, regarding age diversity, the report found that the average age of new directors on boards across Europe is fifty-six, with nearly three-quarters of seats going to those between fifty and sixty-five.
“It is great to see Ireland among the nations with the highest number of board appointments in 2021,” said Stafford Bagot, Regional Managing Partner in Charge of Operations in Ireland.
“With 42% of these appointments being female, it shows deliberate progress made towards improving diversity and inclusion within public company leadership.”
“Another noteworthy trend in Ireland is our approach to risk management and readiness for the future. Ireland remains a critical global and EMEA hub for business, so it is important that the business community takes the lead in appointing board members with sustainability and ESG backgrounds.
Added to this that one-fifth of our overall appointments went to those with experience in these fields, it shows how risk conscious the Irish market is becoming. When we see that this trend isn’t being picked up across Europe, it’s interesting that Ireland has taken an ESG-skew while other countries saw an increase in appointments of those with experience in fields such as compliance and financial risk.”