How directors can beat boardroom burnout as responsibilities rise

Being a director has become more demanding than ever. Factor in committee involvement and the workload can become increasingly burdensome. So how many board seats is too many?

A fast-moving regulatory environment, technological shifts and economic uncertainty has made holding a seat in the boardroom more exacting than ever. Managing multiple directorships is a juggling act demanding increased dexterity.

HCF CEO Sheena Jack GAICD has balanced the duties of a CEO with a range of directorships for more than a decade.

“The growth in complexity and pace is just extraordinary,” says Jack, who sits on the board of three of the health fund’s companies, the Business Council of Co-operatives and Mutuals (BCCM) and is deputy chair of Private Healthcare Australia. “The volume of different things we have to deal with that were never on the radar before is massive.”

She reels off a dizzying array of the forces at play. Ever-evolving regulation and the attendant volume of regulators. Cybersecurity. New skillsets around data, digital and machine learning. Diversity and inclusion. A multigenerational workforce. Post-pandemic shifts such as working from home. Climate change. Then there is generative AI, which Jack sees as the electricity of our time — an incredible advance, but who knows what it might enable in the future?

“All of this has added to director workload, impacting how you need to run your core business.”

It’s not a uniquely Australian problem. The Spencer Stuart Director Pulse Survey 2024 reveals notable insights into the time commitments of US directors, highlighting disparities between public and private company boards. Public company directors reported an average of 242 hours annually on board duties, significantly higher than the 148 hours reported by private company directors. Despite an overall average of 200 hours, this represents a decrease from last year’s 278 hours, although comparisons are complicated by differing sample sizes — 95 respondents in 2023 versus 751 in 2024.

The survey indicates a trend of increased board work, with 70 per cent of directors noting a rise in hours spent on obligations, driven by economic and geopolitical factors. Respondents expressed a need for more discussion time on strategy and performance (70 per cent), CEO succession (44 per cent), talent/human capital (41 per cent), and AI (41 per cent). Conversely, topics like ESG and DEI were identified as needing less focus (37 per cent of directors).

While 74 per cent felt they have adequate time for board meetings, and 81 per cent for executive sessions, many suggested optimising time through more executive sessions, focusing on critical issues, and prioritising discussions over presentations. These findings underscore the evolving demands and priorities within boardroom dynamics.

Juggling multiple directorships is commonplace, particularly on the ASX. OpenDirector’s top 30 most influential Australian company directors list offers an indication of how prevalent the trend is. According to OpenDirector analysis released in October 2024, only six of the 30 hold just one board position. Two directors listed serve four boards. The majority serve two or three boards.

How much is too much?

The nagging question is, how much is too much? Keeping abreast of workloads is not just vital for the health and wellbeing of individual directors. It’s also linked to company success, as shareholders and other stakeholders keep a watchful eye on the workloads of board members.

Countries including the UK look to a points-based system to ensure non-executive directors are giving their shareholders value for money, with NED positions worth one point, NED chair two and executive positions three. More than five points is considered “overboarding”.

Australian Shareholders’ Association (ASA) CEO Rachel Waterhouse says its rule of thumb is five directorships, with the role of chair counting as two directorships. However, she notes the detail is more nuanced.

“It’s important that directors are able to devote adequate time and attention to their roles, especially in times of crisis. They must be able to provide sufficient focus in both the good times and the bad times.”

Macquarie University lecturer Rebecca Bachmann’s Consequences of Director Workload thesis, completed in 2021, explored whether the traditional “director busyness” measure — which focused exclusively on the number of directorships to identify workload, and considered three to be optimum — remains relevant.

Bachmann’s work looked to the US due to its bigger dataset, examining director workload on the boards of 1500 S&P companies from 2007–18. It also explored a “reputation hypothesis”, which advocates that greater workload is indicative of ability. Essentially, the more boards you’re on, the better job you do, while broadening experience into the bargain.

Nuance is important. Bachmann also dug deeper into board committees, which are constantly evolving to cover topics including cybersecurity, AI and climate, to separate directors on multiple boards but not committees from those who throw themselves into committee work.

“We found quite a lot of directors who are considered busy under the traditional measure, but once we looked at their actual workload, looking at committees, they weren’t doing much at all,” says Bachmann. “In contrast, there were quite a few directors who didn’t meet the definition of having three directorships — they might only have two, but they had a lot of committees on those two boards, so arguably they were very busy.”

Busier the better

The “busyness hypothesis” suggests the more directorships held, the less effective some directors can be at various jobs. Bachmann notes many directors are offended by this notion, countering they wouldn’t take the work on if they couldn’t cope.

“We do find directors who have more workload do show up to committee or board meetings,” she says. “They aren’t the ones missing meetings. It’s directors with no workload or additional committees who are absent. So we actually find having this increased workload is a good thing, and we observe directors seem very much capable of self-regulating the workload they are taking on.”

Peter Harmer MAICD took on three directorships within a few months in 2021 (CommBank, the AUB Group and nib holdings) and feels the latter two, being smaller entities, play a big part in managing workload. “Even two large and complex businesses would be exponentially more difficult,” he says.

As a general rule, Harmer thinks holding director roles at three listed companies is enough. He advocates having a portfolio of varied interests, believing that being on advisory councils with management consultants Bain & Company and digital transformation experts EXL services makes him a better director. “I’ve got a better sense of what the issues might be, what our management teams are facing into and what questions I should be pushing and probing on,” he says.

Problems occur if you’re unlucky enough to have simultaneous crises in more than one company, as happened during the pandemic.

Jack agrees. “As soon as an issue happens, you might be having board meetings two or three times a week, and it can be really intense,” she says. “That has to be taken into account. Absolutely nothing is slowing down. Everything is just getting faster and more complex. That’s important for people when they are thinking, how much is enough and how much is too much?”