UK insurers lead on ESG and tech hires in H1 2023
Seventeen per cent of UK insurers appointed board members with professional experience in sustainability/ESG in H1 2023, compared with 14% of banks.
When it comes to tech expertise, half (50%) of UK insurers hired board members with professional experience in tech in H1 2023, compared to 29% of banks.
Omar Ali, EY EMEIA Financial Services Managing Partner, comments: “Against a volatile market backdrop and, at times, major pressures on the European banking sector, financial services boardrooms across Europe have visibly evolved in a short period.
“Participants in the 2023 EY European Financial Services Chairs’ Interview Series feel a mix of skills and more c-suite experience is crucial to cover all aspects of board activity, and it is encouraging to see this coming through in new appointments. Chairs are looking for new non-exec directors to have a strong understanding of the firm’s current performance in relation to the economic cycle and its commercial operating environment.”
Anna Anthony adds: “While we’ve tracked a number of exits in UK financial services boardrooms since January, many firms have seized the opportunity to integrate new skills and strategic experience within their boards – particularly in the area of tech.”
One fifth of UK’s financial boards are yet to reach 40% female representation
Eighty-two per cent of European financial services investors state that the gender diversity of the boardroom has a significant influence on their decision to invest, compared to just 6% who say it does not influence their decision at all.
Of board appointments made at UK financial services firms over the past year (July 2022 – June 2023), 42% were female candidates, representing a 17-percentage point fall year-on-year from 59% in the year to June 2022. Of board appointments made in the first six months of this year, 27% were female and 73% were male. Overall, the current gender split of UK financial services board members remains at 43% female and 57% male.
One fifth (21%) of listed UK financial services firms have under 40% female representation in their boardroom, which is the level required by the FCA’s rules on diversity and inclusion for company boards and executive management, which applied to all listed companies for financial accounting periods starting from 1 April 2022.
On a sector basis, the gender diversity of UK banks lags the insurance and asset management sectors. Almost a third (29%) of banks have under 40% female representation within the boardroom, compared to 17% of insurers and of asset management firms respectively.
The EY Boardroom Monitor also provides clear evidence that women in board roles continue to be less likely to have worked in c-suite roles. Across the UK’s financial boardrooms, 57% of female board members (53% in Europe) hold or have held a c-suite position, relative to 77% of their male counterparts (65% in Europe).
Less than 1% of UK board directors are under the age of 40
Eighty-four per cent of European financial services investors state that the age diversity of the boardroom has a significant influence on their decision to invest, compared to just 6% who say it does not influence their decision at all.
Despite this, fewer 1% of UK financial services directors are under the age of 40. The average age of directors across UK financial services boardrooms is 60. For women it is 58, and for men it is 61 – both consistent with the average ages in January 2023.
Anna Anthony concludes: “Investors place significant value on boardroom diversity, and UK financial firms know they must continue to increase female representation, especially amongst women with c-suite experience. Another key focus is the potential of younger talent – an area which UK firms lag their European peers on, and one that has seen slower than expected progress over the last year. Diverse views, backgrounds and experience are crucial to robust and progressive governance, and to creating the challenge culture required for effective boardrooms. However, in order to achieve this – and to avoid over-reliance on individual directors – a stronger talent pool and growing pipeline of wide-ranging candidates is crucial.”
