(MENAFN- Active DMC) Dubai, UAE; 7 September 2021 – New additions to the board of directors of the top 40 UAE listed companies have shown a preference for individuals with diverse industry experience, according to Board Monitor United Arab Emirates 2021 by Heidrick & Struggles, the premier provider of leadership consulting, culture shaping and senior-level executive search services.
Board Monitor United Arab Emirates 2021 report by Heidrick & Struggles is the first time the firm has shared an analysis of trends of non-executive director appointments in the United Arab Emirates. The report accounted for 52 new directors in the various boards of the most prominent companies listed on Dubai Financial Market and the Abu Dhabi Securities Exchange in 2020.
Active senior executives preferred
Among the new directors, 79% of these seats were filled by active executives rather than retired ones. A number much higher than those seen in Europe (51%) and in the US (57%). 44% of those appointed were either the current or former CEO/CFO, consistent with what has been observed among their western counterparts. The only discrepancy being that UAE based companies have been more favourable to CEOs (42%) than CFOs (2%).
“With the global pandemic and a focus on economic recovery, the new batch of incoming board members had an initiation never experienced by their predecessors. Much like the organization, the board had to reassess the way they conducted business. The situation called for directors to work closely with the executives to improve agility, and this realisation has impacted the board’s decision for new appointees,” said Alain Deniau, head of CEO & Board of Directors Practice of Heidrick & Struggles in MENA region.
Diversity in experience could be key
Another interesting trend among the newly appointed board members is the preference of candidates with experience in other industries. For example, less than a third of the new board members of organizations belonging to the financial, industrial or technology sector had experience in that same sector.
“While overall corporate performance has suffered during the pandemic, boards rose to the challenge of navigating an economic crisis through improving collaboration, implementing new processes and focusing on resilience. As companies look to recover from the pandemic, board effectiveness will continue to be front and centre with boards expected be more diverse and agile than ever,” said Markus Wiesner, Regional Managing Partner, Heidrick Consulting for Asia Pacific, Middle East, and Emerging Markets. In 2020, 25% of all board appointments belonged to people from other countries.
What the future holds
The report identifies that boards in the Middle East are under increasing scrutiny and are taking on higher levels of risk. As a result, there is an increasing focus on improving board effectiveness. In the not-so-distant future, the boards will continue to innovate their refreshment processes with a stronger desire to focus on inclusivity – whether in gender, ethnicity or experience.
Other key findings in the report include:
• The average age of the new board members is 53 (ages for all new appointments weren’t available)
• 62% had previous board experience
• 17% had international experience
• 12% were females
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