It’s not all about gender diversity: the place for Gen Y in the boardroom
According to recent research in Australia, the average age of directors is approximately 63 years for men and 57 years for women for the top 100 listed companies. Korn Ferry research indicates that the average age of NZX female directors is 56 and males are 58.
Should we see that age move closer to 50?
The global financial crisis showed the importance of having experienced directors to navigate through those tough economic conditions and as our population ages and people work beyond the traditional retirement age, boards will most likely continue to have older directors. Many 60 year olds that I have met have more energy and motivation than their younger counterparts.
But the counter-argument is that given the different types of stakeholders each company must represent on boards, diversity in age of directors helps bring different perspectives.
For example, companies in the consumer industry may want to target their customers in different age groups with a variety of products and services. The best way to represent the interests of these consumers would be to have directors who also range in age.
Why don’t more young people sit on corporate boards?
The efforts of a number of organisations to foster a larger pool of well-trained emerging directors is a good start to prepare for younger board appointments over the coming years. I think NZX listed companies are also perfectly placed to take responsibility for nurturing the next generation of Kiwi leaders, including directors.
Put simply, if New Zealand listed companies show a commitment to appointing younger directors then senior executives may start considering governance roles in their late 30s and 40s rather than towards the end of their working careers.
In an age when product cycles are short, customers have short attention spans and competition is more intense and complex, Gen-Y are the best suited to cater to a company’s business needs. Brought up on the internet and with a collaborative mindset, Gen-Y are the willing entrepreneurs who have a considerable appetite to take risk.
It’s a fair bet most boards would like a bit more diversity and one obvious way of achieving that is to have younger members join their ranks.
What is the role of Gen Y in the boardroom?
Gen Y have the opportunity to help develop and influence important initiatives that positively impact the business. Serving on the board also allows them to hone leadership skills that they might not necessarily have the chance to develop through their day-to-day work responsibilities. People who are older and have been serving on boards for years are not always experts or know everything that Gen Y are likely to be talking about.
Gen Y have a lot to learn from our older board members but they also have plenty to teach others as well. For example, a media company board comprised of directors in their 60s could learn a lot by having one or two younger directors who have grown up using social media as a normal part of life.
The attraction of having Gen Y directors is no different for not-for-profits or associations. These organisations need to tap their volunteer or donor bases to find people who are not only committed, but could also bring particular skills.
Some of the best recruits may be ambitious management employees who are impatient with a slow climb up the corporate ladder. Board service can be a great resume builder, and the exposure to a new network of established professionals is invaluable.
Gen Y should not assume that they are too young or inexperienced to make a contribution.
Henri Eliot is chief executive of Board Dynamics, a consultancy company which provides strategic advice to directors and boards throughout New Zealand and Australia.