There are no hard limits on how long a director can serve on a company’s board in Australia,but listed company directors are usually re-elected every three years by shareholders,and a cycle of nine years is seen as typical.
Livingstone highlighted that director tenures had been declining in the long term.
“Two generations,or 40 years ago,it was not uncommon for directors to be on a board for 15 or 20 years,” Livingstone said in an address to an Australian Institute of Company Directors event on Wednesday morning.
Loading
“One generation,or 20 years ago,tenure limits of nine to 12 years had become widespread. Directors generally do and expect to serve their full tenure. But perhaps it’s now time to evolve our thinking again.”
Governance advisory firm Ownership Matters in 2020 analysed a pool of more than 5000 directors who served on ASX 300 boards since 2005. It found the tenure of non-executive directors was lengthy,and board turnover was not dependent on company performance.
The research also showed the number of male directors serving for more than 10 years greatly outnumbered women in a ratio of 9:1.