Board size
The average board size is 10.1, a figure that has remained almost unchanged for a decade.
At our cut-off date, HSBC Holdings had the largest board with 15 members. Rio Tinto and AstraZeneca each have 14 board directors.
Independence
74% of boards in our sample are composed of non-executive directors who are all independent, representing 111 of the 150 total sample.
Executive chairs and vice chairs
There are five executive chairs (3%) in our sample: Nicholas Vetch at Big Yellow, Micky Arison at Carnival, William Jackson at Bridgepoint, Said Darwazah at Hikma Pharmaceuticals and David McMurtry at Renishaw. They are mostly founders or owners of the companies they chair.
There are two executive vice chairs in our sample who are also founders/owners: Will Adderley at Dunelm and Mazen Darwazah at Hikma Pharmaceuticals.
Executives on the board
99% of CEOs and 87% of CFOs sit on the board.
18 companies have one or more additional C-suite executives on the board. NEXT has five executives on the board, the largest number among our sample. Cranswick, Derwent London, and Frasers Group each have four executive directors.
Length of service
The average tenure of the 214 non-executive directors who departed boards in the period under review was 7.1 years. Twenty-five of these departing NEDs had served more than nine years on the board and five had served for 10 years or more. Ten directors retired from their boards after more than 15 years’ service; all but two of them were executives.
Average tenure of departing directors
| |
Total on the board (years) |
Tenure in final role (years) |
| All directors |
7.1 |
5.5 |
| All non-execs |
6.5 |
5 |
| SIDs |
8 |
4.1 |
| Chairs |
9.4 |
6.8 |
| CEOs |
7.3 |
5.2 |
| CFOs |
6.5 |
6.5 |
The average tenure of non-executive directors currently in post (including chairs) is 4.3 years, a figure that has been stable for more than a decade.
5% (51/1,055) of NEDs and 6% of non-executive chairs (8/144) had exceeded the recommended term limit of nine years at our cut-off date.
The average tenure of chairs is 3.6 years in the chair role and 5.7 years on the board. The UK Corporate Governance Code limits chairs to a total of nine years on the board, regardless of how long they have been the chair. Twenty chairs had served for nine years or more at our cut-off date, with seven chairs having served more than 15 years on the board.
The average tenure of current CEOs is now 5.2 years, continuing a three-year decline from 5.8 years in 2021. However, the average tenure for current CEOs on the board is longer at 7.3 years. Sixty CEOs had been a member of their board for at least a year prior to their appointment as CEO, sitting for varying lengths. Also, 23 CEOs were formerly the CFO and 17 were executive directors, mainly regional or divisional CEOs. Five CEOs were appointed from a non-executive role on the board.
Age
The average age of non-executive directors has fallen slightly, from 60.9 to 60.6 years. The average age of non-executive chairs has also dropped slightly, from 65.1 to 64.9 years.
Female NEDs are just over three years younger on average (59 years) than their male counterparts (62.2).
New NEDs have an average age of 58.6 years ; first-time NEDs are just under two years younger on average, at 56.7 years.
The average ages of both CEOs and CFOs have come down slightly, to 55.6 and 52.4 years respectively. Twenty CEOs are aged under 50 years, and only five are 65 or older.
Nine directors are under 40 years old. Three of these (including one employee representative) are on the board at Frasers Group which, alongside Auto Trader, has the lowest average age of 51 years.
Our perspective
The UK Board Index also shines a light on the growing lack of age diversity on UK boards. The proportion of newly appointed NEDs under the age of 50 continued a downward trend, dropping from 12% to just 6% this year, with over 50s now representing 91% of all UK plc directors and 94% of NEDs.. According to Spencer Stuart’s comparative research of boards around the world, UK boards remain 5th within major economies in the ranking for the average age of non-executive directors, which now stands at 60.6.
Boards are grappling with rapid advancements in technology, disruption of the marketplace and an uncertain geopolitical and economic backdrop, as well as having to consider the way in which they interact with and meet the expectations of their key audiences – from anticipating new consumer trends, the potential opportunities and risks of AI, to managing generational divides in the workplace. However, as they face up to this myriad of challenges, boards are opting for more experienced directors to help them oversee, understand and address the evolving external environment rather than appointing individuals with specific experience of these emerging challenges.
Younger perspectives are being heard in certain cases, however, with many boards using other means of bringing in new voices and expertise to provide ‘NextGen’ perspectives, such as shadow and advisory boards.