Growing demand for c-suite experience, as well as political, tech and ESG/sustainability expertise
• GENDER SPLIT: 44% of European financial services directors appointed in 2023 were female, down from 51% in 2022
• C-SUITE EXPERIENCE: 59% of all directors appointed in 2023 brought c-suite experience, but just 38% were female, down from 47% in 2022
• FEMALE REPRESENTATION: 31% of firms still report under 40% female board representation, with women holding the most senior board positions at just 29% of firms
• MOST IN-DEMAND EXPERIENCE: 36% of all directors appointed in the past year brought political experience to the boardroom, down from 41% in 2022; 27% brought tech experience, up from 22%; and 22% brought ESG / sustainability skills, down from 23%
Dublin, January 15th: Appointments of female board directors to Europe’s largest financial services firms declined seven percentage points year-on-year, according to the latest EY European Financial Services Boardroom Monitor, which reports that 44% of all appointments last year were of women, down from 51% in 2022.
While all European financial services firms monitored, including those in Ireland, have female representation at boardroom level, the current gender split across all firms stands at 57% male and 43% female (down from 58:42% in 2022), and 31% of listed European financial services firms are still reporting under 40% female representation in their boardroom. This is below the level required by June 2026 to comply with the European Commission’s European Women on Boards Directive, which requires all companies in EU member states to meet a 40% female target for non-executive boards or 33% for all board members.
The EY Boardroom Monitor charts the profile, experience, training and skillsets of board directors across the MSCI European Financials Index, including in Ireland. The data is supplemented with a sentiment survey of 300 European financial services investors, where 82% of respondents state that boardroom gender diversity has a significant influence on their decision to invest.
C-suite experience in demand on European boards
C-suite experience was the top criteria for new board director recruitment in 2023, with 59% of appointments during the year bringing current or past executive management team experience. However, of directors with c-suite experience appointed this year, just 38% were female, down from 47% in 2022. Across European financial services boardrooms, female directors remain significantly less likely than their male counterparts to have the experience of c-suite role or hold a senior board position. Just over half (51%) of female directors have the experience of an executive management team role, while 64% of male directors have similar experience. Across the population of directors tracked, senior board positions (defined under the FCA’s proposed changes to UK Listing Rules as Chair, Chief Executive Officer, Senior Independent Director or Chief Financial Officer) are held by women at only 29% of listed European financial firms.
Colin Ryan, EY Ireland Financial Services Country Lead, says: “Building a diverse board with the requisite experience to steer large financial firms in the current volatile environment is complex and challenging and has never been more important. The demand for c-suite experience in the recruitment of new directors must not come at the cost of balancing gender representation across Europe’s financial boardrooms and should not indirectly act to prevent new skills and expertise entering the boardroom. It has been evidenced time and again that boardroom diversity – whether in terms of gender, background or experience – is a driver of outperformance over the long term.
“Of course, increasing appointments of female directors with c-suite experience can only take place if there is a strong talent pool and a growing pipeline. The 40% gender diversity threshold under the European directive should help to galvanise firms’ efforts to recognise and nurture female talent throughout career paths – not just towards directorships, but at all levels. Importantly, however, this 40% level of female representation at board level should be viewed as a minimum to build from, not a level to work towards.”
Boardroom skills in demand
Data from the EY Boardroom Monitor shows that 14% of European financial services board directors left their role in 2023, with new appointments lagging departures at 11%. However, financial services firms have used new appointees to continue to deepen political, technology and sustainability skillsets and experiences on their boards. Of directors appointed in 2023, 36% bring political experience (down from 41% in 2022), 27% have professional experience in tech (up from 22% in 2022), and 22% have professional experience in sustainability or ESG (down from 23% in 2022). New appointments are still more likely than existing directors to have sustainability, tech and political expertise and experience. Across all board members, 15% have expertise in sustainability, 18% have expertise in tech, and 33% have political experience. In the past year, a greater proportion of female directors have brought experience in tech (33%) and ESG (27%) relative to male peers, 23% of whom have tech experience and 18% have ESG or sustainability experience.
Colin Ryan says: “As global geopolitical dynamics continue to evolve, and technology and sustainability demands on firms grow ever more complex, bringing new skills and breadth of experience to the boardroom is a priority for financial services chairs across Europe. The need for broader Boardroom expertise will only increase from here, but that does not mean there is any less need for directors with more traditional financial services boardroom skills. Structuring a board that is sufficiently broad in scope, but also has the depth and experience to respond to old, new and ongoing market challenges is a delicate balancing act with constantly moving goalposts.”
