APPOINTING YOUNGER PEOPLE TO BOARDS MAKES SENSE.
Other than accountability and engagement – and the need to measure same – the hottest topic around Board development in recent times has been that of diversity.
Many Boards of companies, institutions, charitable and other organisations are still tightly held and governed by a narrow group who hail from what is frequently (and rather unkindly) called the “pale, male and stale” demographic.
So, for years now, the loudest message on diversity has focused on the comparatively low representation of female Directors on Boards. (Look up ‘board diversity’ on the AICD website and you’ll see the figures are all about women!). More recently, wider debate has hotted up around a perceived need to include more NeDs of non-hetrosexual persuasion.
And the word is finally starting to get through. While the broader gender issue is impossible to measure, slowly but surely across Australia, talented women are claiming Directorships on a wide spread of Boards and Committees. Latest figures show that women comprise 31.3% of new appointments to ASX 200 boards so far in 2020.
But what about the under-represented X and Y’s?
Pushing the women’s issue so loudly and vociferously has tended to overshadow the claims of another group of stakeholders who are even more under-represented on Australian for-profit and non-profit Boards … and that’s the younger working population.
In 2020 – according to statistics published by www.statista.com – 94% of the working population worldwide is made up by generational groups in approximately these proportions.
So, the future is NOW: and the leaders of the future want a part of directing the way it’s shaped.
Leaders are getting younger.
Male and female entrepreneurs are designing software and systems, fashion, design and innovative products to launch successful SME’s from bedrooms, farm sheds and garages – sometimes while they’re still at school.
And CEO’s in their early 40’s are now often considered sufficiently smart and experienced to lead big influential companies or government departments. (Although it’s probably worth note that according to a recent study by PwC, the median age of an incoming top tier CEO was actually 53 in 2018.)
So, it’s no wonder that people who see themselves as shaping up to lead – particularly the Millennials – are badgering to be granted a voice on the Board.
Millennials want to have their say.
“Seen but not heard” no longer cuts it. They want to exert a direct influence on issues that affect them, their families, their communities and their futures.
And it makes a lot of sense to include not only diverse genders but a diversity of perspectives on a Board that is making wide ranging decisions.
Younger people may not know what’s happening in the world banks, moneyed enclaves of their city or have the experience to run a company – but they have an ear to the ground and an eye to the future.
They can tell you what’s in, what’s out, what’s trending, what’s done with and above all, what’s important to them, their friends, workmates and families at diverse stages in their diverse lives.
To survive in business today, you need a finger on the pulse of all that intelligence – and more. It’s not something you’re likely to get from a comfortable careerist in his plush position in the C-suite or from Board Members who are transitioning towards retirement.
With the rate of social, economic and technological change, businesses need to be modern and fluid –geared to foresee breaking developments before they occur and respond effectively.
As one pundit put it so clearly recently: “There’s a whole world of difference in how you sell a phone to a 70 year old and a 20 year old. But you have to know what it is… this week!” Point made!
Businesses with dynamic young representation on the Board remain current and leading edge.
When more members of a community get a chance to participate in decisions that affect their lives, better informed, more rounded decisions can be made. Society is enriched… and business prospers.
So, when you’re weighing up the decisions to be made about strengthening, expanding, modernising or boosting the performance of your Board during the coming AGM season, think long and hard about what diversification means in all its applications.
Especially … take time to mull over the many benefits to your business that a bright and refreshing, entrepreneurial, young technical native could bring to your Board.