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Committees

2021 UK Spencer Stuart Board Index

2021 Snapshot

 6

boards set up an ESG committee

 26

boards have a stand-alone risk committee

 48 %

of audit committee members are women

 57 %

of remuneration committees are chaired by women

Boards in our sample of the largest FTSE 150 companies maintain, on average, 3.8 committees to support their work. Forty-five per cent of boards only have the three obligatory committees (audit, remuneration, and nomination), whilst 55% have at least one additional thematic committee. This proportion has stayed relatively stable in recent years.

Number of board committees

International Public Partnerships’ board is alone in adopting an alternative approach to core committee structure. It maintains a joint nomination and remuneration committee in addition to committees for audit and risk, ESG, investment, and management engagement.

Most companies (57%) have more than the three core committees as part of their governance arrangement, the most common additional committee being risk (17%). Other popular thematic committees are health and safety, present in 12% of our sample, followed by corporate social responsibility (11%) and compliance (9%).

Core committee prevalence and meetings
Prevalence Average number of meetings
Audit 100% 5.5
Remuneration 99% 5.5
Nomination 99% 4.3
Thematic committee prevalence and meetings
Prevalence Average number of meetings
Risk (stand-alone) 17% 7.0
Health and Safety 12% 3.8
Corporate social responsibility 11% 3.4
Financial matters 8% 4.3
Compliance 9% 3.4
Sustainability 7% 5.1
Others 6% 2.9
ESG 4% 2.0
People and Engagement 2% 2.7
Science 1% 4.0
Technology 2% 7.3

Among our sample, the most frequently convened committee was Quilter’s technology and operations committee, with 14 meetings in the course of the year, followed by Carnival’s health, environmental safety and security committee, which met 10 times.

Committee size and meetings

The average size of audit committees is 4.1 members; the two largest audit committees record eight members each (Halma, InterContinental Hotels Group). Audit committees met 5.5 times in the year on average, a minor difference from last year’s 5.2 average.

Remuneration committees are, on average, a slightly larger, at 4.3 members. Smiths Group and Halma have the most members with eight. During the year, remuneration committee members met on average of 5.8 for remuneration meetings, 11% (5.8) more than in 2020.

Nomination committees met the least during the year; on average 4.3 times, the highest number of meetings since 2016. This was also the year that we saw the largest proportion of new appointments, which might relate to the increased number of meetings. Find out more in the section on new directors.

Average number of core committee meetings

Seventeen per cent of boards (26) have stand-alone risk committees, while 20% (30) have joint audit and risk committees. The average number of stand-alone risk committee meetings is seven, one more than last year.

Profile of committee members

Audit

Minority ethnic non-executives make up 10% of audit committee members on average, and 2% (3) of committee chairs. Out of the three minority ethnic audit committee chairs, one is a woman.

Women account for 48% of audit committee members, and 29% (43) of audit committee chairs. International Airlines Group and Softcat have audit committees solely composed of female non-executive directors.

22% of audit committee chairs have experience working at business and professional services firms. The next most common industry background is a tie between financial services (18%), of which the largest sub-sector is banking (4%); and consumer (18%), with the majority of chairs coming from the retail sector (6%).

One-third of audit committee chairs are current or former chief financial officers (43%); the next most prevalent background is audit partner (24%).

Unlike chairs, audit committee members are much less likely to have business and professional services backgrounds. The most common functional background among audit committee members is chief executive officer (23%).

Remuneration

Since 2019, more women than men have held the remuneration committee chair role: The figure has increased from 52% in 2019 to 56% in 2020, reaching 57% in 2021.

Minority ethnic representation continues to lag behind, with only 8% of committee members identifying themselves as such and only 2% (3) of chairs.

Financial services is the most common industry background among chairs of the remuneration committees (29%). Most of this cohort have held C-suite roles (23%), especially as CEO (12%) or CHRO (11%) during their executive career.

Among remuneration committee members, the most widespread background is also financial services (24%), predominantly in banking (8%). More than half of committee members have experience as C-suite executives (52%).

Nomination

Only 20 nomination committees (13%) are chaired by someone other than the board chair; among them are six women and two are minority ethnic directors.

Risk

Women account for 39% of risk committee members and lead 7% (11) of risk committees in our sample. Minority ethnic directors represent 12% of stand-alone risk committee members, and they occupy the chair seat at three boards.