The Market for Corporate Directors - INSEAD Corporate Governance Centre (ICGC) - Report - Page 3
Job Market for Directors
Jose Luis Alvarez, Senior Affiliate Professor of Organisational Behaviour, Mubadala Chair Professor in
Corporate Governance and Strategy and Academic Director of INSEAD Corporate Governance Centre
François-Lucien Vulliermet, Research Associate
Under renewed pressure, increased expectations, and reinforced scrutiny, corporate governance
had started to change in the 2000s. Albeit reforms were implemented and a systemic crisis in 2008,
corporate scandals had not stopped. Corporate governance is, nonetheless, changing. Boards are
more aware of the responsibilities and the duties they hold over companies, and as such, accountable
for their actions and their consequences. As businesses face increasing disruption and need to
rethink their governance, they have transformed to be more efficient to be profitable, sustainable,
and fair, following the triple bottom line.
In this context of transformations, the figure of the central actor has changed little; directors
have remained, if not the same, very similar. The composition of boards have stayed impervious
to transformations with little diversity in directors’ profiles. The cliché of the long-standing male
director with a financial background has persisted. Diversity comes in slowly, and the predominant
typical director’s profile remains. 64% of directors are men who had been sitting on nominations,
strategy, or audit committees. This figure is in line with the main stock market indexes that account
for 1/3 of female directors (S&P 28.3% - FTSE 100 32.7% - SBF 120 45.3% - EURO STOXX 50 37.6% STOXX EUROPE 600 33.9% - CAC 40 45.5%).1
Directors also had to accumulate experience and wait before serving; only 14.4% of directors take
on their role before turning 40. These directors have proven to be resilient and once on board, hard
to budge. In fact, our sample would very much like to keep serving as long as possible; 2/3 (67.7%)
plan to retain their mandate after turning 65, and 6.4% even see themselves still being director at
80 years old. Beside this trivial portrait, one of the most striking learnings from this report is the
dedication directors put in their role with 66.5% of them serving on 3 or more boards. But there is a
stark contrast with women typically sitting on fewer boards than men; 58% of male directors sit on
4 or more boards for only 38% of female directors.
In this report, we look at the market for corporate directors and how they get appointed. Drawing on
the findings of a survey received from 158 directors we focus on the professionalization of directors
and the processes around their appointments: What skills and criteria lead them to get on a board?
Through which channels do they access their position? Do they receive support in their onboarding?
What challenges are they likely to face when serving?
Data provided by Ethics & Boards, partner of the INSEAD Corporate Governance Center