THE BREAK DOWN OF AUSTRALIAN (ASX) LISTED BOARDS
There are serious concerns on the state of the ASX-Listed Boards being put forward to me from an array of key and important stakeholders, from investing institutions, shareholder and senior executives in and out of the ASX-Listed Boardrooms. Many are of the belief that there is a Breakdown in the Boardroom.
Questions have included:
- How does it make sense to have Chairs still in roles after presiding over failed CEO appointments? In some cases, on numerous occasions.
- How does it make sense to have large numbers of Directors on Boards with limited to ZERO relevant industry experience?
- How does it make sense that individuals with limited Senior Executive experience are considered for Boards?
- How is that Directors on FAILED Boards are again appointed to other Boards?
- Why is it that a large majority of CEO’s on ASX-listed companies feel their Boards add little value?
- Where is the DUTY of the Board to do the best for the shareholder…with unsuitable Directors adding little to no value being appointed and allowed to remain?
- Does it make SENSE to invest in ASX companies if this is the case?
These questions are regularly being put forward to the Blenheim Partners Board Practice with other observations around the large number of Board meetings, the heavy weighting on time spent on governance v business and low Director Fees compared to other leading markets.
There has been a shift in market tone of wanting more focus on hard corporate results and greater scrutiny of the so called club. No one doubts that Boards have taken on other considerations and are being stretched. If it’s not the ESG targets, it’s the Remuneration Report or Modern Slavery assessment being questioned. However, the tolerance of Boards trying to appease all and pursue a social agenda is being lost and greater emphasis is being placed on pure business numbers and performance for the shareholder.
Board capability and individual member’s track record is very much being taken to task. With the market placing emphasis on productivity, efficiency and growth the skillsets and relevance of individual Board members and their previous and current contributions is under certainly the lens.
It would be fair to say that a large percentage of the Executive Leadership teams are less than impressed with the Board they present to. The feeling is of near frustration to disappointment in the limited industry or domain experience, the shortage of commercial expertise and overall counsel.
We are also witnessing a surge in interest within the Private Markets.
Blenheim Partners invest in our market. Our aim is to be abreast of the markets and context in which our clients operate. We believe this is critical if we are to provide the most appropriate candidates for Board and Executive roles and to provide market insight and advantage to our clients. If you would like to discuss any Board mandates please contact the Board Practice.
Gregory W. Robinson
Managing Partner, Lead of the Board and CEO Practice