Heidrick & Struggles third UAE Board Monitor reveals that new directors make the youngest cohort globally with an average age of 48.
Dubai, UAE– Heidrick & Struggles (NASDAQ: HSII), a premier provider of executive search, leadership assessment and development services, today launched its third Board Monitor report in the United Arab Emirates (UAE). In pursuit of its commitment to foster sustainability and prosperity, as well as ambitions to lead innovation globally, the country is witnessing a transformation in the composition of boards to address new challenges and demands.
Overall, UAE boards made 31 appointments in 2022, a notable decline from 54 in 2021 and 52 in 2020. At the same time, there is a growing willingness to appoint younger board members. New UAE directors make the youngest cohort globally with an average age of 48, down from 49.7 the previous year. 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. There has been a positive year-on-year improvement in gender representation. Women directors accounted for 23% of appointments in 2022, up from 17% in our 2021 study and 12% in 2020. Additionally, there is a higher number of female first-time board members – 43% of women appointed had previous public board experience, compared to 67% of the men.
In line with many UAE companies plans for international expansion, 6% of 2022 appointees have international experience, compared with 2% in 2021.
“Disruption from technology, particularly AI and machine learning, the flux of foreign investment, and the rise of sustainability on corporate agendas is forcing boards to relook at the mix of experience around the table. 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. They could also benefit from continuing to increase the share of directors with international experience to support their expansion ambitions,” said Maliha Jilani, Partner in Heidrick & Struggles’ Dubai office and Social Impact Practice lead in the Middle East and North Africa region.
UAE boards show a growing willingness to appoint board members without prior CEO experience. While the most common career background for new board members continues to be CEO, only 35% of 2022 appointees have experience in that role, a significant drop from the prior year (56%). UAE companies also showed strong interest in operating executive backgrounds such as chief operating officer (13%), heads of region (10%), and chief investment officer (6%). In particular, the share of seats going to chief investment officers stands out for the 2022 UAE cohort, in preparation for the IPOs and foreign investment flows into the country, as it often does not even make up 1% of new directors’ backgrounds in other markets.
UAE boards also frequently sought directors with experience in financial services, with nearly half (45%) of 2022 appointees having a background in this sector. However, there is a marketwide trend of prioritizing same-sector expertise, especially in the industrial sector, where 100% of directors were appointed from within the sector. By contrast, the consumer sector appears to value, or be most open to, cross-industry experience, with 33% of consumer directors bringing outside experience to the role.
“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 skillset gaps are and adjust searches for new directors to meet their unique situation,” said Richard Guest, partner in charge of Heidrick & Struggles’ Middle East and North Africa based in the Dubai office and the regional managing partner of the global Technology & Services Practice for Asia Pacific and the Middle East.
About Heidrick & Struggles:
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of global leadership advisory and on-demand talent solutions, serving the senior-level talent and consulting needs of the world’s top organizations. In our role as trusted leadership advisors, we partner with our clients to develop future-ready leaders and organizations, bringing together our services and offerings in executive search, diversity and inclusion, leadership assessment and development, organization and team acceleration, culture shaping and on-demand, independent talent solutions. Heidrick & Struggles pioneered the profession of executive search more than 70 years ago. Today, the firm provides integrated talent and human capital solutions to help our clients change the world, one leadership team at a time.®