The UAE is witnessing a transformation in the composition of company boards to address new challenges and demands, with a growing willingness to appoint younger members and embracing more gender diversity, a new industry report said.
New UAE company directors make the youngest cohort globally with an average age of 48, down from 49.7 the previous year, the latest Board Monitor report by Heidrick & Struggles, a leading global leadership search and consultancy, said.
The next youngest cohorts were found in Saudi Arabia and Poland, where the average age of board appointees was 50.
“The shifting profile of newly appointed directors, when compared to previous years, suggests a growing focus on diversity, with a positive year-on-year improvement in gender representation,” the report said.
Women directors accounted for 23 percent of appointments in 2022, up from 17 percent in Heidrick & Struggles’ 2021 study.
Additionally, there are a higher number of female first-time board members – 43 percent of women appointed had previous public board experience, compared to 67 percent of the men, the report said.
Tech disruption sparks board diversity in UAE
“Disruption from technology, particularly AI and machine learning, the flux of foreign investment, and the rise of sustainability on corporate agendas is forcing boards [in UAE] to relook at the mix of experience around the table,” said Maliha Jilani, Partner in Heidrick & Struggles’ Dubai office.
“The increase in diversity at the board level in terms of gender, age and international expansion is a positive sign, and UAE boards should consider to what extent they require sustainability expertise on the board itself,” said Jilani, who is also the firm’s Social Impact Practice lead in MENA.
She said UAE companies could also benefit from continuing to increase the share of directors with international experience to support their expansion ambitions.
Overall, however, UAE boards made only 31 appointments in 2022, a notable decline from 54 in 2021 and 52 in 2020.
The report said UAE boards also frequently sought directors with experience in financial services, with nearly half (45 percent) of 2022 appointees having a background in this sector.
However, there is a market-wide trend of prioritising same-sector expertise, especially in the industrial sector, where 100 percent of directors were appointed from within the sector.
In contrast, the consumer sector appears to be most open to cross-industry experience, with 33 percent of consumer directors bringing outside experience to the role, the report said.
“As the UAE innovates and grows at a global scale, with real momentum in IPOs and foreign investment, boards need to show strong and clear leadership. To sustain its bold ambitions, boards should continue to evaluate performance to understand where the skill set gaps are and adjust searches for new directors to meet their unique situation,” said Richard Guest, Partner in charge of Heidrick & Struggles’ MENA region.
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