Board composition and non-executive director pay in the S&P/ASX 200

The 2012 board composition study, prepared by Ownership Matters and commissioned by the Australian Council of Superannuation Investors, is the 12th annual review of board composition and non-executive director fees in Australia’s largest listed companies. Overall, the study found that S&P/ASX 200 boards are becoming more diverse, a little greyer over time and an increasing number of directors are being selected to serve on boards for the first time in their careers.

There were 108 new director appointments in 2012, including executive directors. Of these, 73 board seats (or 68%) were filled by 70 individuals who were not current Top 100 directors. There were 55 ‘new entrants’ into the S&P/ASX 100 non-executive director pool for 2012.

Despite continued concern over the prospect that key executives may be poached by competitors, analysis of executive departures of 19 CEOs in the S&P/ASX 200 showed that 8 were terminated and 11 retired. There were no examples during the sample period where executive directors were poached by other organisations.

Interestingly, there was a strong trend among new CEO appointments toward hiring internal candidates. A total of eleven appointments were made to replace CEOs who had retired across the S&P/ASX 200. Of these, six were internal appointments – at CBA, QBE, Toll, Challenger, Spark Infrastructure and Atlas Iron. The five companies where retiring CEOs were replaced by external candidates were ASX, Orica, Transurban (where the retiring CEO, Chris Lynch, has now become CFO and an executive director at Rio Tinto, changing from his non-executive role at the mining company), Federation Centres and Coalspur.

All board composition and pay papers are available here on ACSI’s website.