The most desirable experience for aspiring ASX 200 board members is a senior executive position, in particular roles with P&L responsibility, according to a new survey.
The 30% Club and EY joined forces to discover the experience and journey necessary to be considered for an ASX 200 board, and how aspiring directors can position themselves to succeed.
The joint report surveyed men and women who were appointed to their first ASX 200 board in 2018, as well a number of the chairs who appointed them and search consultants who work with boards.
In 2018, 185 non-executive directors were appointed to ASX 200 boards – 113 of them for the first time.
The new directors surveyed believe the top three skills they bring to their boards are leadership, strategy and transformation.
The consensus among respondents is that an executive career develops the technical skills, reputation and commercial exposure that add value to a board. It is also the foundation for the long-term strategic thinking needed to navigate organisations through changing consumer expectations, new competitors and emerging technologies.
Search consultants are increasingly involved in the selection process, providing unbiased lists of candidates and helping chairs develop their selection criteria. The majority of respondents were approached by a search firm for the role.
30% Club chair Nicola Wakefield Evans says: “The survey shows that being part of an exclusive network no longer guarantees a seat on the board and a gender-balanced shortlist is considered the norm.
“It is heartening to note boards are also seeking directors who are emotionally intelligent, demonstrate integrity, courage and have a strong moral compass.”
EY Oceania chief executive Tony Johnson says: “The premise of this research was to ask better questions about how people get to boardroom roles with the best possible experience under their belt. While the research tells us executive experience is desirable, the broader challenge is a lack of representation from female leaders at this level who are developing the operational and technical skills preparing them for board positions.
“To encourage more board diversity, organisations need to do more to increase growth at all stages of women’s careers by creating pathways to senior management roles that are not necessarily the traditional linear career paths.”
Chairs say diligent directors monitor market trends, competitors and their sector in search of opportunities and potential challenges. They also engage in professional development.
However, there are still some factors that can limit opportunities for female aspirants, such as the lack of senior executive experience, particularly running a P&L.
Some female respondents emphasised that women need to work hard on their networking and profile building.
Other key highlights from the survey are:
- Few directors start their boardroom careers with a seat on an ASX 200 board. Among the survey respondents, only 12 per cent of women and 25 per cent of men had their first board appointment at ASX 200 level.
- Government and private board roles are not stepping stones to ASX 200 boards. Governance experience will generally take a back seat to deep executive experience.
- Aspiring ASX 200 directors should be prepared for a long and sometimes frustrating journey. The majority of survey respondents were in their fifties.
- Boards expect to see evidence that the candidate has taken steps to prepare. The journey involves education and development, researching companies, connecting with recruiters and networking.
- Significantly more female respondents had undertaken some form of further education that their male counterparts.