Geopolitical expertise is one of the most underrepresented skillsets on European boards, despite ongoing disruption to trade and economics caused by wars and political conflict, according to new research.

The European Corporate Governance Barometer shows that only 3.5% of board members have geopolitics as an area of expertise, while only 22.2% of boards have at least one member who can say they have relevant experience in geopolitics.

The news comes as trade relationships between the US and the European Union remain fractious and the impact of the conflict with Iran continues to be felt across the globe.

Maria Pierdicchi, chair of ecoDa—the European body for directors’ associations—says: “Europe has built strong governance foundations, particularly in diversity and board structures, including greater representation of international members who help navigate a changing world.

“The challenge now is to catch up with the US and ensure boards are equipped to manage complexity and emerging risks effectively.”

Other emerging risks include cybersecurity and accelerated development of technology.

Dedicated committees

The barometer examines key trades in the STOXX Europe 600 boards and found only 10% of boards have “formal” innovation and technology committees. Around 24% manage these topics in another committee or at full board level.

The report says “the absence of a dedicated committee does not imply these matters are ignored”.

Chair independence is one area in which European companies appear to be outdoing counterparts in the US, with 56.3% of STOXX Europe 600 companies having an independent chair (up from 49.3% last year) against just 21% in the S&P 100.

However, US companies do better with independent board members: 84.6% of directors, compared with 71.9% in Europe.

Board members in Europe have shorter tenure than US directors at 6.1 years on average, compared with 8.3 years in the US. However, in Europe, tenure varies enormously. Norway’s average is 4.6 years, and the UK is five years.

Meanwhile, in Luxembourg and Belgium, directors average eight years. In Germany, Europe’s largest economy, directors are in their roles for 6.1 years, precisely the European average.

European boards are diverse, with 41.4% of board seats held by women. However, only 11.8% of boards have female chairs. Nonetheless, both these proportions have been steadily rising.

Norway has the highest proportion of women on boards, at 47%, and Poland the lowest, at 27%. The UK registers 45%, just behind France on 46%, but well ahead of Germany’s 38%.