Talk on the Street
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Talk on the Street
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Youth – The case for change in the Board Room
Young people are reshaping the business world, and the benefits businesses can reap are significant when they give youth a seat in the boardroom. Company founders like Mark Zuckerberg at Facebook or Sergey Brin and Larry Page at Google all set up their businesses at a young age. Many of the next generation of innovators and disruptors coming through are similarly young, tech-savvy millennials, some of whom have raised millions and sold their companies to giants. Jon Reynolds and Ben Medlock sold their company SwiftKey to Microsoft for $250m last year when they were 30 and 26, respectively.
Despite this, few companies have any non-executive directors below the age of 35. According to a recent study by the IRRC Institute and Board Governance Research in the US, the median average age across all S&P 500 boards is 62.4 years, with little difference identified by company size or industry.
The research also found that more than half (55%) of the S&P 500 companies have only three decades represented on their boards, most commonly directors in their fifties, sixties and seventies. Only 5% of S&P 500 companies have directors from five or six different decades serving on their boards.
Experience is essential and invaluable, of course, so it is inevitable that boards are weighted towards older directors. Helping clients to make NED appointments is a fascinating process and finding those individuals that can use their breadth of experience – often attained over long and diverse careers – to provide companies with new, much needed perspectives is critical. But getting a mix of views and experiences could also mean finding a space for younger people.
Some companies have already taken steps in this direction. Starbucks, for example, appointed Hearsay Systems founder Clara Shih to its board in 2011, when she was aged just 29. Clara was already an influential leader in the tech space at that point thanks to the success of Hearsay, a software company that helps businesses to manage their social media presence. In 2011 she was named one of Fortune’s Most Powerful Women Entrepreneurs.
Examples like Clara are few and far between, however, even as many large corporates strive to keep pace with technological change. Millennials are seen as increasingly important hires in departments such as marketing, data and digital, but it could prove invaluable to find a space for them in the boardroom too.
All of this provides plenty of food for thought as businesses look to ensure they are truly prepared for the future.