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2020 Spencer Stuart Financial Sector Snapshot

Boards of financial sector companies in the S&P 500 index — a universe of 65 companies — tend to be slightly larger, older, longer-tenured and more gender diverse than S&P 500 boards as a whole.

  • The average age of independent directors on financial boards is 64.2 years, compared to 63.0 years for S&P 500 boards.
  • The youngest financial board averages 57.5 years of age, the oldest, 72.8.
  • Financial sector boards average 11.9 directors, larger than the 10.7-member average for S&P 500 boards and the largest of all S&P 500 primary sectors.
  • Independent directors represent 87% of all directors on financial sector boards, higher than the 85% S&P 500 average.
  • The average board tenure of independent directors on financial sector boards is 8.5 years, slightly longer than the 7.9 year average for the S&P 500 index and the second longest for all S&P 500 primary sectors.
  • The longest-tenured financial sector board averages 18.3 years of board service.

Diversity

Gender diversity of financial boards slightly outpaces the S&P 500 universe, with women representing 29% of all financial sector board members in 2020, compared to 28% of S&P 500 directors.

Every S&P 500 board has at least one female director. Ninety-five percent (95%) of the S&P 500 index have at least two female directors, and two-thirds (67%) of S&P 500 boards have three or more female directors. In contrast, 88% of the boards in the financial sector have three or more women directors, the second highest percentage of all S&P 500 primary sectors. Thirteen S&P 500 boards are composed of at least 50% women; one financial sector board is 50% female.

Representation of Women Directors on Financial Boards

When it comes to race/ethnic diversity of the boardroom, 19% of the directors of the 27 financial companies in the top 200 companies are minorities (defined as Black/African American, Hispanic/Latinx and Asian), slightly below the 20% average for the S&P 500 index. The diversity breakdown of financial sector boards varies slightly from the S&P 500: 12% Black/African American (compared to 10% of S&P 500 directors); 4% Hispanic/Latinx (compared to 4% S&P 500); and 3% Asian (compared to 5% S&P 500). According to the U.S. Census Bureau, about 40% of the U.S. population is estimated to be a minority, including 18.5% Hispanic/Latinx, 13.4% Black/African American, 5.9% Asian.

New independent director backgrounds

Thirty-seven companies — 57% of the 65 surveyed S&P 500 financial sector companies — added at least one director over the past year. Appointees averaged 59.4 years of age, higher than the 57.8 average for all independent directors joining S&P 500 boards and the second highest average age of all sectors in the S&P 500. First-time directors represented 42% of directors joining financial sector boards — significantly higher than the 28% overall average for the S&P 500 and the highest percentage of all primary sectors in the S&P 500.

Half of the 50 directors joining financial boards over the past year are diverse directors; 40% are women; 10% are minority men. The appointments lag the S&P 500, where 59% of directors are diverse, including 47% women and 12% minority men.

Just over one-third (36%) of the directors joining financial sector boards are actively employed, the lowest percentage of all S&P 500 primary sectors. In contrast 49% of independent directors joining S&P 500 boards in 2020 are active executives.

Compared to the S&P 500 incoming class, financial sector boards recruited a significantly higher percentage of financial professionals, with 42% having experience as a financial executive, investment manager, banker, public accountant or similar financial role. The sector appointed no division or subsidiary executives, academics or lawyers. The lion’s share (92%) of additions to finance sector boards are finance/accounting professionals (42%); current or former CEOs (30%); line/functional leaders (14%); and other top corporate executives (6%).

2020 Financials2020 S&P 500
CEOs30%29%
Active10%13%
Retired20%16%
Chairs / presidents / COOs6%6%
Active2%3%
Retired4%3%
Line and functional leaders14%16%
Division / subsidiary presidents0%7%
Finance / accounting executives42%27%
Financial executives / CFOs / treasurers10%14%
Investment managers / investors10%8%
Bankers / investment bankers20%4%
Public accounting executives2%1%
Academics / nonprofit executives0%3%
Consultants2%3%
Legal 0%2%
General counsel0%2%
Lawyers0%0%
Others6%7%
Government / military2%5%
Others4%2%

Board leadership

Most financial sector CEOs also serve as board chair. The chair and CEO roles are separated at only 40% of financial sector boards — significantly lower than the 55% average for the S&P 500 index and the lowest percentage of all sectors in the S&P 500 index. Executive chairs are in place at 6% of financial sector boards, compared to 13% for the S&P 500 and the second lowest percentage of all sectors in the S&P 500 index. Independent chairs are in place at 31% of financial sector boards (compared to 34% of the S&P 500), while 78% of financial sector boards have an independent lead director (compared to 73% of the S&P 500).

Board organization and process

Compared to the S&P 500 index, financial sector boards and their committees tend to be larger and meet more frequently than the S&P 500 index. The sector held the most board and audit committee meetings of all primary sector companies in the S&P 500. Relatively fewer financial sector companies have a classified board. A higher percentage of financial sector boards — 74% — have age limits for directors, compared to 70% of S&P 500 boards.

Financial sector boards average the second highest number of committees of all primary sectors in the S&P 500, averaging just under five committees. In addition to audit, compensation and nominating/governance committees — in place at all financial sector companies — 64% have a risk committee, a requirement for many financial services companies; 38% have an executive committee; 28% have a finance committee; and 18% have a technology committee.

2020 Financials 2020 S&P 500
Classified board5%10%
Board meetings (avg #)97.9
Board committees (avg #)4.94.2
Audit committee
Size (avg #)54.4
Meetings (avg #)10.18.2
Compensation committee
Size (avg #)4.74.3
Meetings (avg #)6.25.9
Nominating / governance committee
Size (avg #)4.64.4
Meetings (avg #)5.34.5
Mandatory retirement74%70%
Retirement age (avg)73.773.6

Editor's note: Data in tables and charts may not total 100% due to rounding.
 

Financial Sector Companies

AFLAC
American Express Company
American International Group
Ameriprise Financial
Aon plc
Arthur J. Gallagher & Co.
Assurant
Bank of America Corporation
Berkshire Hathaway
BlackRock
Capital One Financial Corporation
Cboe Global Markets
Chubb Limited
Cincinnati Financial Corporation
Citigroup
Citizens Financial Group
Comerica
Discover Financial Services
E*TRADE Financial Corporation
Everest Re Group
Fifth Third Bancorp
First Republic Bank
Franklin Resources
Globe Life
Huntington Bancshares
IntercontinentalExchange
Invesco
JPMorgan Chase & Co.
KeyCorp
Lincoln National Corporation
Loews Corporation
M&T Bank Corporation
MarketAxess Holdings
Marsh & McLennan Companies
MetLife
Moody's Corporation
Morgan Stanley
MSCI
Nasdaq
Northern Trust Corporation
People's United Financial
Principal Financial Group
Prudential Financial
Raymond James Financial
Regions Financial Corporation
S&P Global
State Street Corporation
SVB Financial Group
Synchrony Financial
T. Rowe Price Group
The Allstate Corporation
The Bank of New York Mellon Corporation
The Charles Schwab Corporation
The Goldman Sachs Group
The Hartford Financial Services Group
The PNC Financial Services Group
The Progressive Corporation
The Travelers Companies
Truist Financial Corporation
U.S. Bancorp
Unum Group
W. R. Berkley Corporation
Wells Fargo & Company
Willis Towers Watson Public Limited Company
Zions Bancorporation