Board size
The average board size is 10, slightly up from the 9.6
recorded in 2023 across the Bel Mid and Bel 20 companies under review. Board
composition ranges from five to 17 members. Such consistency may suggest that
companies have identified an optimal board size conducive to effective
governance practice.
The average number of directors varies by industry. The
technology, media and telecommunications (TMT) and services sectors both record an increase from 10 to 11
directors. The healthcare sector averages nine directors, rising from eight
last year. Boards in the industrial and financial services sectors each have
nine directors, unchanged from last year. The consumer sector also remains
steady, at 10 directors.
Independent directors
The number of independent directors has increased since
2023, among both chairs and non-executive directors.
In 2023 39% of chairs were Independent, compared with 44%
in 2024. This was driven by a 22% rise from 41% to 50% among independent chairs
at Bel 20 companies, alongside an increase from 38% to 40% in the proportion of independent chairs at Bel MID
companies.
The population of independent NEDs among the Bel Mid
companies rose from 61% last year (140 NEDs out of 229) to 66% (114 NEDs out of
179) in 2024. Among BEL 20 companies the proportion of independent NEDs versus
all NEDs is stable, registering only a 1% fall from 2023 to 2024.
This may indicate that companies are striving to increase
accountability and, especially, transparency in their governance structures — and,
in the process, also giving rise to more diverse perspectives.
Women directors
Levels of gender diversity have been mixed this year. Women now represent 39%
of all board members (182 out of 470 directors across both indices), demonstrating
slow but steady progress from 2023 (37%, 198 out of 536 directors) and the year
before (35%, 200 out of 571 directors).
There are several instances where female board representation exceeds 50% — at
Colruyt, for example, women account for 63% of board seats. We note, too, that
the proportion of experienced women NEDs with more than nine years of tenure has
expanded, from 12% to 15%.
Our survey also reveals a 7% increase in the number of boards with women occupying senior leadership
roles, such as CEO, CFO, SID and chairs. Additionally, there has been a
55% increase in the proportion of women executives within these boards, moving
from 11% to 17%.
Yet there remains room for improvement: at our 31 May 2024 cut-off date, there were three
female CEOs out of 47 (at Syensqo, Azelis, and Barco). Furthermore, women
account for only 17% of all board executives.
The 2020 Belgian Code on Corporate Governance mandates that
a minimum of 32% of board members should be women to ensure gender diversity.
While the majority of listed Belgian companies comply with this requirement, women
constitute 30% of board members at seven companies.
Only one company, Brederode, has no women board members.
Foreign directors
We define foreign directors as having a nationality that differs from that of the company. On that basis, there are 182 foreign directors (39%) on the boards of the companies under review.
The proportion of foreign directors stands at 39%, unchanged from 2023, when there were 56 companies under review, compared to this year’s
47. However, the proportion of newly appointed foreign directors rose to 71% in 2024, from 41% last year.
This trend over the past years highlights a significant shift towards global representation within corporate governance.
Financial services records the largest proportion of foreign directors of 34%,
rising from 29% in 2023, with the industrial sector following closely at 32%,
up from 26% last year.
Among the 47 companies analysed, only Argenx and Shurgard
have 100% foreign directors on their boards. Fourteen of the 47 companies under
review either have no foreign directors at all, or have not disclosed fully the
nationalities of all board members.
Industries such as consumer or healthcare have tended to maintain
a domestic focus. We note though that foreign directors in the consumer sector now
account for 9% of directors, and 14% in the healthcare sector. This might reflect
that companies are seeking more diverse points of view and expertise, as well
as global networks.
Our 2024 analysis records 14 non-Belgian CEOs at the
companies under review, falling from 17 in 2023. However, the figure
constitutes an increase of 13% in relative terms because the sample of
companies (47) is smaller than last year’s 56. One explanation is companies’ preference
for local market knowledge and cultural fits. In 2024, 75% of CEOs were company
insiders (32 out of 43 CEOs); only 25% (11 out of 43 CEOs) were recruited
externally.
New directors
In our research for this edition, we have observed a drop in
both the number of new directors (individuals not previously part of the board)
and that of first-time appointed directors (individuals taking on their first board
mandate). Conversely, the number of foreign new directors and foreign
first-time appointed directors has risen.
Since our 2023 Board Index, there has been a notable decline
in the number of newly appointed directors, from 74 (across 56 companies) to 38
(across 47 companies) in 2024. Expressed in relative terms, this represents a
change from 14% in 2023 to 8% in 2024.
Additionally, there has been a significant 75% reduction in
the appointment of first-time NEDs, from 29 individuals in 2023 to just six in
2024. This trend could be attributed to longer director tenures, resulting in
fewer opportunities for turnover. Alternatively, it may indicate a shift
towards prioritising the recruitment of directors with prior board experience.
The presence of foreign new board members has increased significantly, showcasing a
rise from 2023, with their proportion among new directors climbing from 41%
to 71%. Specifically, while there were 30 foreign new board members out of 74
new directors in 2023, this number dipped slightly to 26 out of 38 new
directors in 2024.
However, in terms of foreign first-time NEDs, there has been an increase. Although the
actual number fell from 12 in 2023 to eight in 2024, due to the overall smaller
pool of new directors, the figure still represents considerable proportional growth.
This change illustrates a notable trend: that despite a fall in absolute numbers,
the relative proportion of foreign directors, especially those serving for the
first time, has grown significantly, underlining a shift towards greater foreign
representation on boards.
Please note: The comparison aims to highlight the change in the number of foreign first-time NEDs
year-on-year. Although the absolute number has fallen, the percentage increase
is calculated based on their representation among the companies evaluated, emphasising
the importance of considering both absolute and relative changes in such
contexts.
Sector and functional backgrounds
Our analysis reveals a compelling correlation between
company sectors and the professional backgrounds of their directors, with financial
services and industry emerging as the most common sectors among directors. This
is particularly notable, given the preponderance of financial services and
industrial companies among our group this year.
Among the 47 companies analysed, the sectoral distribution is
as follows: financial services accounted for 36% (17 companies), industry for
34% (16 companies), consumer for 10% (five companies), healthcare for 8% (four
companies), and TMT&S (technology, media, telecommunications,and services) for 8% (four companies).
In terms of directors’ sectoral backgrounds, financial services
was the most prevalent, representing 28% (124 directors), closely followed by industry
at 26% (115 board members). This trend underscores a tendency for companies, to
select board members with relevant sectoral experience. Such alignment is usually
a legal requirement in the financial services sector.
This pattern also holds true across gender diversity, with
25% of women board members having an industrial background and 23% originating
from financial services.
Of those women board members appointed during the 2023–2024 period, 52% bring industrial experience, particularly within the
pharmaceutical and chemical sectors. Business services emerged as the second most-common
background for newly hired directors, at 15%.
The predominant functional background among directors is
that of CEO, accounting for 38% (167 directors), followed by functional leaders
at 33% (146 directors) and CFOs at 11% (47 directors). Other notable areas of
experience include positions related to finance and audit, HR,
entrepreneurship/founding, government affairs, academia, and legal.
Among audit committee members, financial services is the dominant
background, representing 35% of the total; and for remuneration committee
members it accounts for 25%. The functional backgrounds of both these committees
consist predominantly of individuals who previously held CEO or functional
leadership roles, accounting for 68% in the audit committee and an even higher
76% in the remuneration committee.
In the audit committees, previous CFOs constitute about 18%
of the members, which aligns with the committee’s financial oversight
responsibilities. However, in the remuneration committees, the representation
of former CFOs drops significantly to 4%.
Among nomination committees, industry emerges as the
dominant sector, with 38% of its directors having backgrounds in the sector.
The functional composition within nomination committees also skews heavily
towards those with experience as CEOs or functional leaders, representing 79%
of the committee members’ backgrounds.
Age of board members
There has been a general rise in the age of board members,
affecting various roles and demographics, including NEDs, chairs, vice chairs,
and newly appointed directors, without distinction by gender. Among the 47
companies analysed, 19 (40%) have no directors under the age of 50.
Nevertheless, the average age of executive directors has seen a modest six-month
drop.
Women serving as NEDs are, on average, 2.9 years younger
than their male counterparts on boards. Even so, their average age rose from
56.7 to 58.1 years, indicating that the women directors onboard this year are
on average 1.4 years older than those in the previous year.
New directors appointed in 2024 are significantly older than
those appointed in 2023, with their average age rising from 54.6 to 60.4 years,
a notable increase of 5.8 years. This could suggest a trend where boards are
inclined increasingly to enlist more seasoned individuals, possibly valuing the
depth of experience and perspective they bring.
The observed trend across various board roles indicates an
overall increase in age. Chairs, irrespective of gender, saw an age rise from 64.5
years in 2023 to 65.2 years in 2024. Among vice chairs the age increase was more
pronounced, from 57.2 years to 61.6 years in 2024.
Among NEDs, both men and women, the average age rose from
63.8 years in 2023 to 64.8 years in 2024.
Contrastingly, the average age of executive directors fell slightly,
from 55.9 years in 2023 to 55.4 years in 2024. This indicates that while the
broader direction is towards older age profiles for most board roles, among executive
directors profiles are younger.
The trend in favour of older board members suggests a
strategic preference for seasoned professionals who offer extensive experience,
earned wisdom, continuity, and robust networks, thereby enhancing governance
structures. These qualities are perceived as vital for insightful
decision-making and long-term strategic planning.
The shift towards younger executive directors, meanwhile,
reflects a deliberate move to infuse boards with fresh perspectives,
adaptability, and innovative capacities. Younger executives are often seen as
being more attuned to new technologies and market trends, and their energy and
ambition can be pivotal in driving a company’s competitiveness in a rapidly
evolving business landscape. This balance between seasoned insight and youthful
dynamism is essential for enhancing a board’s effectiveness in navigating
challenges and seizing opportunities.
Length of tenure
Average tenure among chairs stands at 13 years; among CEOs
it stands at 11.8 years. That average tenure for both roles is quite close is
likely to reflect heightened shareholder confidence in those key leadership
figures who demonstrate consistent performance and vision.
Among chairs, these levels of extended tenure may too reflect
experience and perception earned in previous directorial roles.
By contrast, the average tenure of NEDs (excluding chairs)
stands at six years, significantly shorter than tenure seen among chairs. This underscores
the different roles and expectations placed on NEDs, versus the more senior
leadership positions within the board. It is possible that NEDs undergo more
frequent rotation in order to infuse new perspectives and expertise.
A majority of chairs — 56% — serve for more than nine years; a lengthy tenure
shared by 42% of their CEO counterparts. This reflects a stable leadership
presence at the top.
The tenure landscape for NEDs, however, is quite different, with 27% having held
their positions for periods ranging from one to three years. But there is a
clear shift towards longer tenure among these directors in 2024 compared to
2023. Specifically, the proportion of NEDs with less than a year’s tenure dropped
from 17% in 2023 to just 8% in 2024, indicating a growing trend towards
stability in NED roles.
Among foreign directors, tenure predominantly falls into two categories: either one
to three years (29%), or four to six years (27%). Nonetheless, board tenure
among foreign directors tends to be shorter than among the wider group of all NEDs.
For instance, 24% of the directors have tenures longer than nine years, compared
with 16% of foreign directors.
Women directors record shorter tenures than their male NED counterparts. The average
tenure of women directors on boards is 2.6 years fewer than that of their male
colleagues, highlighting a disparity in tenure length based on gender.
Furthermore, only 15% of women NEDs have served for more than nine years, which is 38% less
than the aggregate for all NEDs.