Board directors serving the UK’s largest financial services firms currently hold an average of three board seats each, and a third (33%) hold four or more, according to the latest EY European Financial Services Boardroom Monitor.

This comes as new sentiment polling data finds that 82% of European investors surveyed believe that holding board positions at three or more firms – rising to 85% if one is at executive level – could present a significant challenge to board directors’ abilities to fulfil their duty of governing a company.

Amongst the most senior board members at UK financial services firms – chairs and executive directors – the average number of positions held is two. Across all European board members, sitting on more than one major financial services board is less common: only 2% of directors tracked hold two or more board roles at the largest European financial services firms.

When asked to identify the primary driver behind directors assuming multiple board positions, just over a quarter (26%) of investors cited board members’ desires to gain broader experience and over a fifth (22%) cited remuneration. Separately, 19% of investors believe it relates to a shortage of female candidates with sufficient experience, however, current EY Boardroom Monitor data does not support this, finding that the proportion of women sitting on three or more boards correlates with the gender split of the total director population tracked.

From a sector perspective, directors at UK financial services firms holding multiple board positions are most common within banking, where 65% of board members hold more than two board positions. In the insurance and asset management sectors, 40% and 39% respectively of board members hold more than two board positions.

From a UK regulatory perspective, while there are limitations to some board director portfolios, there is no blanket regulation to restrict or mandate the number of board roles that can be held by an individual. 

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Commenting on this, EY UK financial services managing partner, Anna Anthony, said: “Financial services firms in the UK are operating in an increasingly complex external operating environment and are focused on building highly skilled, relevant and resilient boardrooms. There are many valid reasons for board members to hold more than one position, but a careful balance must of course be struck.

“Companies and chairs are looking to appoint a diverse board of directors with the right skillsets and breadth of experience, while also ensuring that all members have the capacity to fulfil the demands of these critical governing roles – both during business as usual and during times of stress. Striking this balance can be particularly challenging when the pool of board-level candidates is small.”