Directors’ Remuneration & Board Composition

In 2021, the Irish asset management industry continued to be impacted by fluid COVID-19 related asset price volatility and operational risks as variants emerged. The industry was further impacted by changes in Central Bank if and government economic policies. Despite these issues, it was still a successful year. Rio Howley and our Asset Management team detail our analysis below.

Our fifth annual analysis of directors’ remuneration and board composition examines over 240 publicly available financial statements of UCITS companies including 2,180 sub funds and assets under management of €1.8 trillion.  At the end of November 2021, there were 8,351 funds and assets under management totalling over €3.7 trillion, of which UCITS structures represent 5,089 funds and €3 trillion assets under management. 

The report highlights that there has been a steady increase in the representation of women on UCITS PLC boards over the last 3 years. In 2019, for 16% of the funds had female directors, this has gradually increased to 18% in 2020 and has now increased to 21% in our 2021 report. This is consistent with the latest Central Bank of Ireland report which shows that 20% of directorship appointments in 2021 within the Asset Management sector are females. The gender composition of boards has also changed over the years, with the number of all male boards decreasing and a corresponding increase in boards of mixed genders from 51% in 2019, 55% in 2020 to 58% in 2021.

We noted the following trends in regards to the composition of the board of directors for the 241 companies (213 companies in 2020, 216 companies in 2019) analysed:

• 47% of directors were independent directors in 2021 (48% in 2020, 45% in 2019).
• 79% of directors serving on the boards of the companies were male (82% in 2020, 84% in 2019).
• For independent directors appointed during the year, 47% were female and 53% were male directors, compared to 49% female and 51% male in 2020.
• 41% of companies had all male directors (44% in 2020, 49% in 2019) and 2 boards had all female directors (1 board in 2020).

Based on the data obtained, there were 120 director appointments in the year (38 of which were independent) which has increased from 95 in our prior year report (39 of which were independent). These values include the situation where a director is appointed to a number of boards in the year.

There are indications from the data that boards are improving their corporate governance practices. This year, some key findings include:

• the split of independent and non-independent directors on the board move closer to 50/50;
• board compositions are becoming increasingly mixed between the genders; and
• the average number of independent directors per company by sub-fund has increased during the year

Of the 241 companies analysed in 2021 and 213 in 2020, we found that the number of directors varied from 3 to 9 directors. The majority of companies (55% 2021, 57% 2020) had either 4 or 5 directors.

We did not identify any companies with no independent directors. (2020: 4)

We also identified 24 companies with 4 or more independent directors. (2020: 22 companies)

If you have any queries on the contents of our report, board composition, or director's remuneration, please contact our team below. We'd be delighted to hear from you.