Insurers may struggle to recruit non-exec directors amid increasing regulation
Insurers may soon struggle to recruit non-executive directors as increasingly prescriptive regulation puts pressure on those performing such roles.
This is according to The International Underwriting Association (IUA), which warned that rising responsibilities may shrink the talent pool of available candidates and drive up the cost of recruiting non-executive directors.
The trend also presents challenges for improving the representative diversity of boards.
Chris Jones, IUA director of market services, said: “The increasing pressure on non-executive directors is a key concern across the insurance industry.
“While the underlying principles behind many regulatory initiatives are laudable, they may have the unintended consequence of undermining the very corporate governance advantages they seek to promote.
Jones added that non-executive positions are becoming less attractive to existing and future candidates because there is an “increasing obligation for them to focus more on a company’s day-today activities and take on duties that go beyond their traditional responsibilities.”
“As a result it seems that companies are finding it more and more difficult to attract and retain the individuals they need to sit on boards in a non-executive capacity,” he said.
The IUA’s most recent comments on corporate governance have been made in response to a Prudential Regulation Authority consultation paper on board responsibilities.
“While there are no measures here that directly increase the burden on non-executive directors, the proposals on board composition do need to be considered in the light of other regulatory initiatives,” said the IUA.
