Former insurance executives spread their wings
Insurance executives make good non-executive directors, according to a new study by financial research group Riskmetrics.
It says former banking and insurance executives dominate the top 20 boards listed on the Australian Stock Exchange.
Riskmetrics Co-Head of Asia Pacific Governance Research Martin Lawrence told insuranceNEWS.com.au these executives now hold 20% of all non-executive director positions. If investment bankers are thrown into the mix the figure rises to 30%.
At the time of the study, there were more insurance and banking companies in the top 20 than any other industry – they include QBE, Suncorp, AMP, Macquarie Bank, and the four big banks – but that still doesn’t explain it all.
“The finance sector in Australia is disproportionately large so that might explain why there are a lot of these executives out there,” Mr Lawrence said. “It would be interesting to look at what impact that extra finance expertise has had on companies.”
Riskmetrics’ board composition review also shows boards continue to be dominated by Anglo-Saxon men. But the number of women on boards is increasing, and women are also more likely to be professional non-executive directors than men.
“The board composition has very little to do with shareholders,” Mr Lawrence said. “It’s not the boards’ fault, either – they are getting very little guidance from shareholders.”
It says former banking and insurance executives dominate the top 20 boards listed on the Australian Stock Exchange.
Riskmetrics Co-Head of Asia Pacific Governance Research Martin Lawrence told insuranceNEWS.com.au these executives now hold 20% of all non-executive director positions. If investment bankers are thrown into the mix the figure rises to 30%.
At the time of the study, there were more insurance and banking companies in the top 20 than any other industry – they include QBE, Suncorp, AMP, Macquarie Bank, and the four big banks – but that still doesn’t explain it all.
“The finance sector in Australia is disproportionately large so that might explain why there are a lot of these executives out there,” Mr Lawrence said. “It would be interesting to look at what impact that extra finance expertise has had on companies.”
Riskmetrics’ board composition review also shows boards continue to be dominated by Anglo-Saxon men. But the number of women on boards is increasing, and women are also more likely to be professional non-executive directors than men.
“The board composition has very little to do with shareholders,” Mr Lawrence said. “It’s not the boards’ fault, either – they are getting very little guidance from shareholders.”