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:
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