VISION AND LEADERSHIP GOVERNANCE Focus on Board composition More than three-quarters of companies have between nine and 14 members, with the most common Board size being nine and the average 11. Figure 2.4 Figure 2.5 Average number of executives on the Board? MARKET TRENDS AND OUTLOOK How many Directors do companies have on their Boards? 3 Post-financial crisis, the focus for many companies has undoubtedly been on refreshing their Board in order to provide a different perspective on matters and to ensure that, particularly in the wake of plummeting share prices, they were seen to be taking a proactive approach to turning things round. Naturally there is a fine balance between a fresh approach and ensuring that there is continuity in decision-making – particularly in challenging times. With the focus now shifting to boardroom diversity, we are also seeing an increasing number of companies trying to emphasise the quality and composition of their Board by graphically illustrating Director experience or nationality to demonstrate that they have the right people in place to do the job. Clearly as composition continues to be a significant corporate governance issue, this is undoubtedly an area where we will see further developments in reporting over the coming years. Figure 2.6 BUSINESS DESCRIPTION STRATEGY RISK • • • • 8 or fewer 9 to 11 12 to 14 15 or more 16% 50% 24% 10% The largest Board comprised 18 members and the smallest only six, evidencing the array of approaches taken depending on the size, scale and geographical spread of a company’s operations. When looking at the breakdown of executives and nonexecutives, the average numbers are consistent with last year – three and seven respectively. In addition, over a third of companies have double the number of non-executives as executives and, in a handful of instances, Boards comprise only one executive and up to eight non-executives. Board composition must be driven by the needs of the company and is critical to ensuring that there is a proper balance between company and industry knowledge, and the independence and objectivity offered by independent non-executives. CORPORATE RESPONSIBILITY PERFORMANCE Average number of non-executives on the Board? APPROACH TO REPORTING 7 www.blacksunplc.com © Black Sun Plc 2011 11
