The Directors Club

Investors and shareholders have long had a sneaking suspicion that a "club" exists when it comes to choosing ASX listed directors. Now it appears there is proof.

Amid the reluctant (and limited) bloodletting at Crown Resorts' annual meeting last week, the board ructions at Boral and the looming annual meeting season, large investors are becoming increasingly fed up with the lack of talent on boards of ASX-listed companies.

Ethical Partners investment director Nathan Parkin says the report effectively proves his long-held concerns that there is a directors "club". The former Perpetual fund manager would like to see people with more relevant industry experience rather than the same people, often with valuable legal or accounting experience, appointed to the board.

"That small, small cohort of directors control a lot of companies in Australia and it's very much an invitation-only club."

"We've been saying for a while that the directors are the only people that nominate new directors and they often come from within the same pool.

"The director pool is quite small and recycled too often and this report proves that and I think that's something that has to change going forward."

Parkin says it means that boards too often attract like-minded people, meaning that if existing board members are unlikely to challenge management, they'll look to appoint passive directors like themselves.

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