(MENAFN- Active DMC) Dubai, UAE; 14 November 2022 – New additions to the board of directors of the top 40 UAE listed companies have shown a preference for first-time public board directors, according to Board Monitor United Arab Emirates 2022 by Heidrick & Struggles, the premier provider of leadership consulting, culture shaping and senior-level executive search services.
Board Monitor United Arab Emirates 2022 report by Heidrick & Struggles marks the second time the firm has shared an analysis of trends of non-executive director appointments in the United Arab Emirates. The report accounted for 54 new directors in the various boards of the most prominent companies listed on Dubai Financial Market and the Abu Dhabi Securities Exchange in 2021, up from 52 the previous year.
First-time public board directors preferred for new perspectives
Among the new directors, 61% of these seats were filled by first-time public board directors rather than those with experience, with a significant increase from 38% the prior year. A number much higher than those seen in Europe (43%) and in the US (43%).
The first-time directors less often have CEO backgrounds (44% compared to 75% among experienced directors) and more often bring a wider set of C-suite experience. 13% had COO experience compared to 0% among experienced directors; and 19% other C-level beyond CEO, CFO and COO; compared to 10% across experienced directors.
6% of first-time public board directors have a sustainability experience with no experienced directors having this background.
“Internationally, a new corporate license to operate and a new conception of the corporation are developing. We see more boards looking for independent directors or individuals with international experience to help with this fresh direction. Another core business pillar is ESG which is becoming increasingly instrumental in corporate access to capital. Leaders are facing scrutiny as stakeholders demand more accountability and transparency; and to help organizations navigate this increasingly pertinent issue, we are starting to see boards in UAE add directors with sustainability experience in their portfolio,” said Maliha Jilani, partner in Heidrick & Struggles’ Dubai office and Social Impact Practice lead in the Middle East and North Africa region.
Additional findings on gender and age diversity
The share of seats going to women in the UAE saw an uptick in 2021 (17%), though compared to Europe (43%) and US (45%) it remains low. UAE also saw one of the largest shares of seats allocated to directors under 45 of any of the 24 countries Heidrick & Struggles’ tracks. The average age of newly appointed directors in ADX/DFM companies in 2021 was 50, a marked decrease from the previous year’s average of 53.
What the future holds
As UAE companies seek to build sustainable international growth, their boards will need agility to both deal with unexpected events and achieve a certain level of foresight, as well as to continue to integrate fresh perspectives into their leadership that will complement the experience of more seasoned business leaders.
However, there is no single prescription for board composition. Each company is in a different stage of maturity, in different industries and locations, and pursuing unique strategies. Each board should ensure its refreshment strategy reflects the organizational purpose and goals for the long term and prioritize efforts to add fresh perspectives where they will make the most difference. Thinking of board succession planning as an ongoing exercise will help UAE companies to be resilient and future-proof.
Other key findings in the report include:
● The percentage of active executives in 2020 vs 2021 is 79% to 96%
● Share of seats going to directors with CEO experience in 2021 was 56%
● The industrial industry saw the highest number of board directors with same-industry experience (91%), with technology & telecoms seeing the most board directors with cross-industry experience (75%)
About Heidrick & Struggles
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of global leadership advisory and on-demand talent solutions, serving the senior-level talent and consulting needs of the world's top organizations. In our role as trusted leadership advisors, we partner with our clients to develop future-ready leaders and organizations, bringing together our services and offerings in executive search, diversity and inclusion, leadership assessment and development, organization and team acceleration, culture shaping and on-demand, independent talent solutions. Heidrick & Struggles pioneered the profession of executive search more than 65 years ago. Today, the firm provides integrated talent and human capital solutions to help our clients change the world, one leadership team at a time. ®
About the Board Monitor
This report is part of Heidrick & Struggles’ long-standing study of trends in board composition in countries around the world. Produced by our CEO & Board Practice, these reports track and analyze trends in nonexecutive director appointments to the boards of the largest publicly listed companies in Australia (ASX 200), Belgium (BEL 20), Brazil (BOVESPA), Canada (TSX 60), Denmark (OMX Copenhagen 25), Finland (OMX Helsinki 25), France (CAC 40), Germany (DAX and MDAX), Hong Kong (Hang Seng), Ireland (ISEQ), Italy (FTSE MIB), Mexico (BMV IPC), the Netherlands (AEX), New Zealand (NZX 10), Norway (OBX), Portugal (PSI 20), Saudi Arabia (Tadawul), Singapore (STI 30), South Africa (JSE Top 40), Spain (IBEX 35), Sweden (OMX 30), Switzerland (SMI Expanded), the United Arab Emirates (ADX and DFM), the United Kingdom (FTSE 350), and the United States (Fortune 500). Information about executives is gathered from publicly available sources, BoardEx, and a Heidrick & Struggles proprietary database.
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