Myth 3... The boardrooms of Australia are a club. I’m not in the “club” so I probably won’t get a board seat.
In this article I look at the facts behind the myth that the boardrooms of Australia are a tight-knit group and entry is via a secret handshake or phrase. The comments last week from the Federal Treasurer, Scott Morrison, about the perception of a 'Director's Club' point to the timeliness of this article.
I’ll concentrate on the ASX300 boards, for which information is more readily available and on which we have completed some analysis. Of course, these are not the only organisations with boards. There are around 7,000 Government Boards across the country and of the order of 6,000 Board roles for registered charities. In addition, as of the 1st of June 2018, there were a total of 2,268 companies listed on the ASX. All of those require some form of corporate structure that has Directors as part of the equation.
If we concentrate on the ASX300, as at the 1st of January 2018, there were 2030 Board roles and 1627 individual directors filling those seats… so there is some consolidation. Looking a little further 1348 (82.8%) Directors held one board role and a further 190 (14.1%) had two roles. Only 89 Directors held two or more roles and they form only 3.1% of the Directors sitting on ASX300 boards.
Maybe that ‘club’ does exist amongst that 3.1%... but it’s a pretty small ‘club’ and by far and away the vast majority of ASX300 board seats are widely distributed.
On a final note
Many Board appointments are made to Directors who do not hold other board roles and are not part of any ‘club’. Do not assume you are out of the running before you even start... or you will be.
In the next article I’ll follow on from this myth with another one; namely, it’s all about who you know.
To build your portfolio apply the 4 Ps:
Pragmatic, Planned, Persistent and Professional.
Catch up on all the all articles in the series.