Board directors serving Europe’s largest financial services firms currently hold an average of three board seats each, and over a quarter (26%) hold four or more, amid warnings that this could potentially put at risk their ability to properly fulfil their duty of governing a company.

According to the latest EY European financial services boardroom monitor 82% of European investors surveyed believe that holding board positions at three or more firms – rising to 85% if one is at executive level – could present a challenge to board directors’ abilities to adequately discharge their responsibilities.

Amongst the most senior board members – chairs and executive directors – the average number of positions held is two. Across all board members, sitting on more than one major financial services board is less common; only 3% of directors tracked hold two or more board roles at the largest European financial services firms.

EY points out that from a regulatory perspective, while there are local market limitations to some director roles, there is no blanket regulation applied across European financial services markets to restrict or mandate the number of board roles that can be held by an individual.

Omar Ali, EY EMEIA financial services managing partner, said: “Concerns about ‘overboarding’ and the knock-on effects it could have on governance are increasingly topical. A careful balance must be struck by companies and chairs to build a board with the requisite skills and breadth of experience to face new and increasingly complex risks while ensuring that all members have the capacity to dedicate the time and resources demanded by the board role. This is particularly the case for board directors serving on multiple boards of businesses that are facing into challenges at the same time, and when the talent pool of qualified candidates is small.

“Whilst there are a number of reasons board members hold more than one position, there are associated risks to monitor. Participants in the 2023 EY European financial services chairs’ interview series spoke of concerns that the prestige of a board seat could affect willingness to challenge the status quo – an attribute deemed critical by chairs and regulators – and that some board members might be financially dependent on their board positions, which impacts their independence.”

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