Australia: Report on Board Composition and Non-Executive Director Pay in the Top 100 Companies

The Australian Council of Super Investors has published research on the composition of S&P/ASX 100 listed company boards and the pay of non-executive directors in respect of financial years ending in 2009.

Key findings from the study are as follows:

• Top 100 Australian companies have heeded investor calls for independent non-executive directors to comprise a majority of the board, with the 2009 study finding independent directors held 69 percent of all board seats. This is the highest level recorded in the history of ACSI's longitudinal studies of Top 100 boards over the past eight years and is an increase from the level of approximately 65 percent for the past four years.

• The number of Top 100 directors holding no other ASX listed board seats increased compared to 2008, with 55 percent of all individuals holding office as a director of an S&P/ASX 100 entity holding no other ASX listed board seats, up from 31.4 percent in 2008.

• Female representation on boards remained stagnant in 2009 as it has since 2006. Women accounted for 11.1 percent of all individuals holding S&P/ASX 100 board seats and 12.1 percent of all board seats (in 2008 women accounted for 10.1 percent of all S&P/ASX 100 directors and 11.1 percent of all board seats). Women held just 3.5 percent of chairperson roles in the S&P/ASX 100 and 4.1 percent of executive director positions.

• Nearly 30 percent of S&P/ASX 100 companies in the sample had no female directors in 2009, compared with 32 percent in 2008. Just under a quarter of sample companies had more than one woman on the board, largely unchanged from 2008.

• For the second year in succession individuals new to S&P/ASX 100 boards accounted for a narrow majority of new non-executive appointments. Individuals who prior to 2009 had not served as directors of Top 100 companies represented 52.2 percent of all individuals appointed to Top 100 non-executive roles in the 2009 sample period, up from 50.6 percent for 2008.

• In 2009 average and median non-executive director remuneration continued to increase, although by lower rates than in prior years. The average Top 100 non-executive chairperson in 2009 received $442,994, up from $439,449 in 2008 (in 2008, the average increased 12.6 percent) while the median was also effectively unchanged at $400,000 after a 10.9 percent increase to $396,880 in 2008. The average non-executive director's remuneration, excluding chairpersons, was up 3.6 percent to $190,027 in 2009 after a 5.6 percent increase in 2008, while the median rose 5.5 percent to $186,288 after a 8.6 percent increase in 2008.

For complete report see here (pdf).