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Concerns have been raised about the effectiveness of board members at European financial services companies, as more than a quarter hold multiple positions in different organizations. This data, released by EY along with interviews with fund managers, highlights the need for more diverse skills and gender representation in accordance with an upcoming EU directive.
Tara Cemlyn-Jones, CEO of non-profit organization 25×25, which aims to improve female representation in senior executive roles, expresses her concerns about the negative impact of individuals appearing on multiple boards, hindering the creation of diversity in skills. The number of directors with multiple board positions varies across different sectors, with asset management firms having close to fifty percent of board members holding more than two positions. Surprisingly, even among banks, the figure stands at approximately forty percent, contradicting the belief that board directors at lenders avoid taking on excessive commitments due to governance risk.
This research conducted by EY covers a wide range of organizations, including private firms, charities, and public institutions, which are usually overlooked in similar studies. More than 80 percent of the 300 fund managers surveyed expressed the view that holding more than three board positions could hinder directors’ ability to fulfill their duties effectively. Omar Ali, EY’s financial services managing partner, highlights concerns raised by chairs at financial services companies, suggesting that the prestige associated with a board seat could deter individuals from challenging the status quo. Additionally, board members’ potential financial dependence on their positions could compromise their independence.
Renée Adams, professor of finance at Saïd Business School, stresses the need for further research to better understand the issue of overboarding, emphasizing that financial services firms may be encountering difficulties in finding individuals with the required competencies.
The research also reveals that nearly 30 percent of European financial boards have less than 40 percent female representation. Starting from July 2026, an EU directive will require large listed companies across the EU to achieve a 40 percent level of female non-executive directors, or 33 percent across all directors. Failure to meet these requirements may result in the annulment of a board, with several EU countries already implementing similar regulations, such as Germany, Spain, and Italy. In the UK, the Financial Conduct Authority has already mandated listed companies to report on their progress towards targets, including achieving 40 percent female board representation since April of last year.
Cemlyn-Jones emphasizes that having more women in senior roles is even more crucial than increasing their representation on boards alone. She warns that without female representation at the executive level, the gender pay gap will persist, regardless of the composition of the board.
Additional reporting by Anjli Raval
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