Experienced directors are valuable. Their long careers give them the benefit of having seen several business cycles. They can use their experience to share perspectives and provide expertise to help management address certain challenges more effectively.
But the environment is also evolving and directors who are younger may be particularly well positioned to add value as companies address new challenges.
The current state of play in the UK for boards and age diversity
Sadly the current picture in the UK shows us exactly what age diversity doesn’t look like: Spencer Stuart reports in the largest UK FTSE companies, corporate boards are growing older. In 2017 the average age of directors surpassed 60 for the first time.
Results revealed the extent to which a lack of diversity of perspective, age, gender and ethnicity continues to be a major disadvantage, with the majority of mid size business (MSBs) confirming few female board directors and little diversity.
MSBs on the whole acknowledge the need for increased diversity on their management teams and boards. But it is questionable if this need is associated with value and the tangible operational and organisational benefits diversity is evidenced to deliver, or rather diversity is a box needing to be ticked.
Evidence would suggest many chairs and boards have an inability to connect diversity with performance - otherwise we would see a greater increase of diversity on boards and a decrease in the age of boards.
So not a good starting point - but not insurmountable.
Understanding why youth is overlooked and undervalued at the board level
Lets understand the problem a little better. Why is youth overlooked and undervalued at the board level?
In my research, and the boards I work with, expertise is an increasingly high priority criteria for board member recruitment - they are facing specific challenges and want people around the table equipped to help them deal with them.
However, often ‘experience' is used interchangeably with ‘expertise’. Board appointments are often made so companies can benefit from the members’ business experience and the expertise that experience delivers.
However, we know this is not always the case. An obvious but important example involves the technology literacy gap that exists across most boards outside of the tech sector and specifically amongst mid size business.
We must debunk the myth that experience equals expertise and help educate chairs and boards as to the specific value young directors can provide to the challenges they face. This makes the appointment much less about age and much more focussed on the business and the value youth can provide to it.
Another dimension that contributes to youth being overlooked and undervalued is the assumption that years in business provide you with leadership qualities and the EQ to impart, mentor and govern well.
In the same UK MSB study, board directors cite leadership qualities as more important than technical expertise in contributing to board capability and effectiveness.
But we know these qualities are not (only) determined by age and experience. Science tells us many of the characteristics of leadership, for example self awareness as well as work style preferences are hard-wired and can be highly effective from a young age.
Finally, another factor inhibiting the appointment of younger directors and trustees, is the unconscious bias and chemistry that comes when you first meet – connectivity and ‘relate-abilty’ are key to most early relationship building. This can be the difference between progressing at interview and not.
The specific and high value contribution of younger board members
So why should chairs and boards consider young directors and trustees? There are a range of ‘broader’ benefits youth can bring to the board room:
- Different insight and perspective, which ultimately will lead to better governance
- Enthusiasm for the role (as they are often keen to develop skills) means full engagement
- Fresh creativity and ideas on your board will challenge long standing beliefs and systems
- If your beneficiaries or market include young people, young directors can increase the board’s credibility in the eyes of these groups
- Diversity of any kind can bring brand benefits
There are also some very specific and differentiated value young directors can provide. And older members will find it difficult to replicate the vital role a young director or trustee can provide in addressing technology literacy gaps as well as acting as a workforce and customer advocate.
Let me explain...
Young directors are often technology natives and can address a tech fluency gap
A "tsunami of technology-driven change”, the digital revolution and technologies like robotics and artificial intelligence are reshaping corporate opportunities—and the workforce. Nearly 96% of millennials are digital natives. In many other countries, youth are three times more likely than other age groups to be online. Being tech savvy comes with many advantages.
Younger directors are native technologists and can also provide specific and more contemporary technical knowledge and expertise If they have subject matter expertise even better, but just being of a generation born into tech using tech habitually gives them an advantage and makes them an asset.
Young directors can provide workforce advocacy to help address the skills shortage
UK business particularly are suffering a skills shortage. Our workforces is increasingly Millennial.
With closer proximity to the workforce demographics, expectations and preferences, younger directors can help organisations develop more relevant retention and reskilling strategies.
Young directors can provide customer advocacy and 'main-line' insight into meetings
Millennials are about to become the most powerful consumer group with spending habits and priorities that are different from any generation before the. Millennials represent the largest generation ever, yet few of them serve on the boards of companies. This is a huge missed opportunity for companies, who perhaps haven’t yet realised the myriad of ways having a young perspective can benefit both their brand and their business model.
This is particularly true when your serving an organisation with international operations. Think about this:
- 66% of Middle East and African population is under 30
- It's 52% in Latin America
- And 48% in Asia
As markets expand internationally, their potential customer base grows younger and younger. Younger directors have direct and personal insight they can ‘mainline’ into board discussion.
Having a homogenous (and elderly) board can create a disconnect between the average member and the demographics of potential new or loyal customers.
It is simply good business sense to have board members who can relate to this massive pool.
Some tips to pursue a board role and get it as a (relatively) younger executive.
The bottom line is, to keep up with the ever changing market trends and forces companies need to diversify their leadership. Today I have shared some of the valuable contributions a young director can make but I’m not the one who needs convincing.
To get those roles, it’s all about educating and helping chairs and boards discover the value youth can provide. So here’s some suggestions to get on boards as a young director.
- Be really clear on your value to that board. Prepare a one pager that explicitly points out the business value you can provide that goes beyond experience.
- Be prepared to advocate and educate that experience is not the same as expertise - push your technical expertise and knowledge of emerging technologies and their business application.
- MSB directors value experience, including leadership and emotional intelligence, more highly than technical expertise - Get a psychometric profile done to independently document your leadership, EQ and cohesive qualities and tap into directors seeing this as more important than technical expertise in contributing to board capability and effectiveness.
- Advocate for the Chair to consider his or her board a tapestry, of which you are part and can play a complementary role.
- Do your homework and marry up with the right fit for you. Be clear on the value you want to add and the type of NED role you want (roll your sleeves up in a small business or more strategy and government in a larger firm).
- Look the part and get the chemistry as right as you can. And in some cases try to fit the mould - at least in the short term (heels in the interview, trainers ever after) but avoid being disingenuous.
- Get qualified – there are lots of good courses out there.
- Maintain a professional membership.
- Volunteer and observe.