The board of directors is at the heart of corporate governance – and as the responsibilities associated with the board expand to cover topics like ESG and cybersecurity risk oversight, as well as destabilizing market conditions and changing regulatory requirements, so do investor expectations. While average support for director elections remained high in most markets, the 2024 proxy season saw the board’s composition and performance subject to a wider scope of scrutiny than ever.

In the third installment of our Proxy Season Global Briefing, we provide a rundown of headlines and key trends relating to director elections and board composition from around the globe. You can also access the full Briefing here, or via the content libraries on Viewpoint and Governance Hub.

Board of Directors

Shareholder Voting Results

North America saw shareholder sentiment on board elections moving in opposite directions, with fewer failed directors in the United States but more in Canada for the second year in a row

  • In our overall U.S. coverage, 69 director nominees failed to receive majority support, a significant decrease of 26% from 93 failed directors last year. However, there was no change in the number of failed directors in the Russell 3000 index (39 directors both years).
    • Of these 69 directors, a limited number have left their boards, as plurality voting standards and resignation policies are very common in the U.S. So far only 6 have resigned or had their resignation accepted, while 8 directors’ resignation was rejected. Both figures represent a decrease from 2023.
  • In Canada, 9 director nominees failed to receive majority support, continuing an upward trend (3 in 2022 and 7 in 2023).
  • Of the 9 failed directors, 4 serve on the board of Alta Copper Corporation (“ATCU”), a mineral exploration company with a multitude of governance issues, including insufficient attendance and disclosure, lack of independent board leadership, and gender diversity concerns.

Support for board elections at large European companies remained strong

  • All large European companies that held uncontested majority elections saw all director nominees receive sufficient support, with one exception.
    • At Ferrexpo, a Swiss-based, UK-listed commodity and mining company which was until recently a member of the FTSE 350, the re-election of director Vitalii Lisovenko did not receive majority support from independent shareholders. In accordance with UK Listing Rules, Lisovenko currently remains on the board pending a second shareholder vote.
  • On the UK’s FTSE All-Share, Digital 9 Infrastructure plc saw an unusual level of board voting drama for an investment trust, with one director nominee failing to receive sufficient support and another withdrawn.

Director opposition spiked during Australia’s most recent proxy season

  • In Q4 2023, 29 director nominees at S&P/ASX300 companies received substantial (>25%) opposition, a notable increase from 13 the prior season.
    • While independence, overcommitment concerns, and controversy remain drivers of protest votes, the increase appeared to be largely fueled by more concern from shareholders regarding a company’s poor performance, problematic capital allocation decisions, questionable remuneration practices and/or perceived lack of gender diversity on boards.

Gender Diversity

Board gender diversity continues to increase across Europe, North America, & Asia, but remains lower in leadership and executive positions

  • Europe already leads the way for board-level gender diversity globally, so aggregate increases at large and medium-sized European companies were almost negligible in 2024. On average, over 40% of board positions at large and medium-sized European and UK companies are held by women.
    • The most notable increases in Europe this year were in Spain, where over 70% of large- and mid-cap companies now have at least 40% of board seats held by women (2023: less than 50%).
    • Average gender diversity on European executive teams slightly increased to 26.5%. The UK and Norway are leading the way, with over 35% of executive positions being held by women. Italy is the only major European market with less than 20% of executive positions held by women (15.0%).
  • North American boards continue to become more gender diverse, with Russell 3000 companies averaging 30.2% women directors during the 2024 proxy season. Average gender diversity at the largest Canadian companies is just below 40%.
    • Gender representation in U.S. board leadership positions also continued to increase, with women representing more than 30% of all key committee (nominating/corporate governance, audit, and compensation) chair positions. In Canada, one in five board chair positions are held by women
  • While increases in board diversity in Asia Pacific were generally modest, there has been a substantial reduction in the number of all-male boards.
    • In Japan, the number of all-male boards at Prime Market-listed companies more than halved this year from 12.2% to 4.9% of companies, while the number of TOPIX 100 boards with greater than 30% gender diversity more than doubled to 20.6%.
    • In Hong Kong, nine of the ten HSLCI companies with all-male boards in 2023 appointed at least one female director this year, likely driven by listing rule requirements that come into effect at the end of the year.
    • The number of all-male boards at Korean companies increased to 10.3%, suggesting that local market requirements are not being strictly enforced.
  • There continues to be a large range in gender diversity on the boards of companies in Latin America, both across and within markets, although there have been some moderate increases in 2024.
    • Despite the introduction of ‘comply-or-explain’ recommendations on board diversity last year in Brazil, average gender diversity fell slightly in 2024, and there was an increase in the number of all-male boards.

Board Diversity Beyond Gender

Board racial/ethnic diversity continues to increase among North American and UK companies, with reporting more widespread than ever

  • In the U.S., racial and ethnic diversity on S&P 500 boards increased from an average of 23.4% in 2023 to 25.3% in 2024.
    • A similar increase was found among Russell 1000 companies, where the racial and ethnic diversity on the board increased from 22.1% in 2023 to 24% in 2024.
  • In Canada, 88% of S&P/TSX 60 companies provided clear disclosure regarding racial/ethnic diversity on the board. Of these companies, average board ethnic/racial diversity was 16.9%.
    • Just 16 companies had a board that was at least 20% ethnically diverse.
  • In the United Kingdom, 87% of FTSE 350 companies and 97% of FTSE 100 companies have achieved the Parker Review target of at least one ethnic minority director on the board.
    • Where ethnicities are disclosed, ethnic minority directors represent 24.8% of the total number in the FTSE 350 index.

Board Skills

Senior executive experience and core industry expertise are highly desired for director candidates at the largest U.S. companies

  • This year, Glass Lewis introduced a comprehensive assessment of director skills in our Proxy Papers for U.S. companies in the S&P 100 index, which indicates that senior executive experience is the most common skill among directors in the index (held by 74%).
  • However, it appears that among new directors, more emphasis is being placed on core industry expertise (held by 67% vs. 59% for senior executive experience), suggesting that more companies are looking beyond the C-suite and considering a wider pool of candidates.
    • Financial/risk skills, and expertise in international sales and markets were also popular amongst newly appointed directors.

Disclosure of board skills continues to become more common — and relevant to voting decisions — in North American markets

  • Two-thirds (67%) of Russell 1000 companies in the U.S. disclosed a board skills matrix, an increase of 16% over last year.
  • The Canadian S&P/TSX 60 index leads North America in skills matrix disclosure, with 94% of companies incorporating one in their proxy statement, consistent with 2023.

Looking for more?

Check our blog for additional installments of our Proxy Season Global Briefing. You can also access the full Briefing here, or via the content libraries on Viewpoint and Governance Hub. The first two posts in this series are also available on our blog, covering shareholder rights & governance trends, and executive pay.

In the coming weeks, future installments will cover other topics. We will also share more of our proxy season findings, including details of Glass Lewis voting recommendations and analysis, via a series of market-specific Proxy Season Reviews in September and webinars in October.