The board service landscape

Did you know?
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The board service landscape

Did you know?

On average, public company boards appoint fewer than one new director each year, so opportunities are limited.

The EY Center for Board Matters provides this resource to professionals who aspire to serve on a corporate board. Included are tools to help guide your journey to the boardroom.

Why is it challenging to land a board seat?
  • There are limited opportunities. S&P 500 companies appointed 406 new independent directors in the 2024 proxy year. This is 6% fewer new appointees from five years ago and up from 388 new directors in the 2023 proxy year, according to Spencer Stuart's 2024 Board Index.
  • Turnover rate for directors continues to be low. Spencer Stuart notes that 58% of S&P 500 boards appointed at least one new director, which translates to turnover of less than one (0.83) new director per board.
  • Supply of qualified candidates far exceeds demand. Boards are thinking differently about what makes an effective board candidate and the supply of possible candidates is expanding significantly. This larger pool means boards can be even more selective about their short lists.
  • Boards strongly prefer candidates they personally know. Usually there is only a degree of separation between a candidate and the board and management.
  • Bias exists towards those who already have public board experience. Public company board service is often a primary requirement for a board seat, which immediately eliminates many candidates.
A look at Fortune 500 board members

386 new director appointments

59
This is the same as the previous year.

Average age

42%
- The highest percent of CEOs reported was 60% in 2018.

Current or former CEOs

23%
This is the highest percentage since tracking started.

Current or former CFOs

59%
In the two prior years, 62% of directors were active executives.

Active executives

33%
This is down from a record high of 43% in 2021.

First-time directors

43%
In 2016, 28% of new directors were female.

Female

For more detail on compensation, board size and meeting frequency, click here to request a link to Corporate Governance by the Numbers.

Source: "Board Monitor US 2024,” Copyright © 2024 Heidrick & Struggles International, Inc. All rights reserved.

Board refreshment efforts

Opportunities ahead

  • Board refreshment is a common way to optimize skills and boardroom experience to best address company strategies, risks and opportunities.
  • Boards are seeking directors with specialized experiences, e.g., cyber; talent; environmental, social and corporate governance (ESG), to oversee emerging risks and business disruption.
  • Institutional investors and other stakeholders want boards to prioritize board refreshment and bring diversity to the boardroom.

 

29% S&P 500 boards have at least two board members over 70 who have served more than 10 years as of December 31, 2024. Since many boards have tenure and retirement policy limits, those seats might turn over in the years ahead.
Top traits and skills sought in the boardroom

What boards look for in a candidate

  1. Distinguished performance in a senior leadership position
  2. Industry and functional expertise
  3. Meaningful experience in the boardroom
  4. Deep understanding of business operations
  5. Strategic thinking with a diverse perspective
  6. Cultural fit with the board and the company