In a word, yes. Direct experience tells us that senior individuals are becoming much more cautious and discerning. For some, the traditional progression from executive to non-executive is now less obvious. They are much more focused on the personal risk and, in some cases, on the massively increased time commitment. There may also be others, particularly those who have created financial independence for themselves, for whom the opportunity/cost and risk/reward of being a non-executive director in Financial Services no longer adds up; these people may well look elsewhere for their directorships.
It is more complicated than that. On the Board side, there is a growing supply and demand imbalance as well. Not only is regulation keeping some people away from the Board table on the one hand, it is also requiring an increasing number of entities – often subsidiaries – to appoint additional independent directors on the other. At the same time, the time requirement for a Financial Services board has increased significantly, meaning that those who do want to sit on Boards may hold fewer directorships. Furthermore, there is growing competition for senior talent from other parts of the industry such as private equity and, increasingly, FinTech. Although still minimal today, there is some evidence that senior Financial Services executives are being attracted out of the sector as well. While the financial reward can be less, the lure of an opportunity to be creative, innovative and impactful in a more lightly regulated industry should not be underestimated in the future.
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