Should your company be on the hunt for young directors?
Here’s why including the leaders of tomorrow on boards now is about more than just succession planning.
Quick take
- Directors under the age of 40 are likely to be considered young, depending on the industry and the current board composition.
- They may offer deeper insights into the needs and expectations of younger generations that can benefit a business and challenge current board assumptions.
- Young CAs who want to become directors need to balance their own perspectives with valuable institutional knowledge and keep the company’s best interests top of mind.
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'Young' is a relative term. Kamala Harris was 59 years old when she entered the US presidential race, 19 years junior to 78-year-old Donald Trump, the 47th president of the United States.
Back then, Harris’s candidacy was heralded as a revitalisation. The Atlantic said she brought a “youthful energy.” Vox greeted her as “a breath of fresh air.” The New Yorker called her “next-gen.” But when transported to other contexts, Harris might be considered significantly, let’s say, learned.
Research company McCrindle says that 60 is the median age of a grandparent in Australia. It’s also the average age of a board member, according to the Australian Institute of Company Directors (AICD). So, when it comes to boards – the corporate coalfaces where decisions are made and the fortunes of governments strategised – how young is young?
Australian, Roger Chao, is an experienced CEO at just 39, having worked across private, public, and non-profit sectors as a chair, non-executive director and board consultant. “Defining ‘young’ in the context of board appointments is not about an arbitrary number but rather about mindset, experience and relativity,” Chao tells Acuity. “Age, in governance, is somewhat of an elastic concept.”
Chao says that, in a boardroom traditionally populated by individuals in their 50s and 60s, a 40-year-old might be considered youthful. “Conversely, in industries driven by technological innovation such as fintech or biotech, a 40-year-old founder might be seen as a seasoned veteran.
“The essence of youth is not purely chronological but is characterised by one’s proximity to the nascent ideas and cultural shifts that will shape the world in the coming decades. This also depends on the board’s existing demographic composition and the industry’s pace of change.”
It is a question that is hard to respond to, without applying your own lens. “The answer tends to change as you get older, doesn’t it?”, says Kirsten Patterson, chief executive of the Institute of Directors New Zealand (IoD) and chair of the Global Network of Director Institutes.
“I can tell you that just 1% of our New Zealand members are in the 18-to-29 age group. The majority – 60% – are aged between 40 and 59. So, I think it would be fair to characterise any director under 40 as young in our governance community.”
“Defining ‘young’ in the context of board appointments is not about an arbitrary number but rather about mindset, experience and relativity.”
What benefits can young directors bring?
Boards don’t court younger members merely for succession planning. They can pierce a monoculture and allow boards a greater understanding of trends and desired demographics.
“I think there are some broad comments we can make on what younger directors may bring to the board table,” says Patterson. “Chief among them is what we might call a generational perspective on governance issues such as climate change and the use of artificial intelligence.”
One celebrated Australian campaigner for board diversity is Claire Braund, co-founder of Women On Boards and a 2014 Order of Australia recipient. While conducting her Churchill Fellowship in 2010, she acquired an understanding of what diverse viewpoints can bring in an interview she conducted with Sir Philip Hampton who was responsible for appointing a first, second, third and fourth woman to the board of UK supermarket chain Sainsbury’s.
“He told me a very funny story about shopping trolleys,” says Braund. “The story goes that they were losing customers to another chain. It wasn’t huge, but it was enough to be worrying and enough that it had been brought to the board’s attention.
“He said that one female had come on the board, and that sole female board member said, ‘Well, it’s the shopping trolleys’. All the male board members just looked at her blankly and said, ‘Pardon?’. She repeated, ‘It’s the shopping trolleys. They’re dreadful’. And all of them looked at each other. Not one person on that board outside of her had shopped at Sainsbury’s.”
Experiences like this can be extrapolated from shopping trolleys to social media, increased online augmentation and overall digital transformation.
“I think there’s been a growing appreciation in boardrooms over the years of people who bring a different perspective: who come at a problem or an issue differently and approach it from a different style,” Braund says. “It’s like a mathematician approaching something, versus someone who’s an expert in humanities.”
What should be considered when hiring a young director?
While one of the benefits of having young people on your board is to shake up the status quo, that shouldn’t come at the expense of positive culture. When a board considers younger candidates, there is more to comb over than simply their closer proximity to a demographic.
“Equally critical are characteristics such as intellectual humility, the courage to challenge conventional wisdom and a capacity for nuanced, critical thinking,” says Chao.
“Younger directors who can juxtapose disruptive thinking with respect for the institutional memory embedded in the board are invaluable. They must demonstrate emotional intelligence, resilience in the face of entrenched views and the ability to engage in sophisticated dialogue, balancing their ideas with an appreciation for the complexities of corporate governance.”
Chao says an ideal candidate is someone who not only has the technical skills aligned with the company’s future direction but also shares a philosophical alignment with the long-term objectives. He adds that the most effective young directors understand the dual role of protecting the company’s interests while pursuing these future directions.
Having age and gender diversity at the table contributes to varied discussions and facilitates an ever-evolving board that will stay ‘forever young’. Surely that’s an opportunity for revitalisation no business or organisation can pass up.
Four tips for first-time directors
A young board director himself, Roger Chao shares advice if you are keen to get involved in governance and join a board.
1. Seek with purpose
Finding board positions is all about strategic networking. Networking should not be confused with superficial relationship building: it is a purposeful and intellectual exercise aimed at cultivating trust, reputation and visibility within relevant circles.
Engaging with industry bodies such as the Australian Institute of Company Directors (AICD) or the Institute of Directors New Zealand (IoD) can provide not only formal education but also access to a network of seasoned professionals who can offer mentorship and open doors.
2. Once on board, listen and learn
Listen deeply and learn voraciously. Immerse yourself in the company’s culture, governance frameworks and strategic challenges. Understanding the company’s history, its competitive landscape and the board’s internal dynamics is essential before you can make meaningful contributions.
New directors need to resist the temptation to make their mark too quickly; instead, young directors should build credibility by asking insightful, strategic questions that demonstrate an eagerness to understand the complexity of the business and governance.
3. Embrace your perspectives
Beyond technical knowledge, the true value you bring is the ability to shift paradigms. Boards often operate within established frameworks shaped by decades of experience and, while this wisdom is invaluable, it can also create blind spots. Your role is to challenge assumptions: thoughtfully, respectfully, but persistently.
You add value by being the bridge between the old and the new, the legacy and the future, ensuring that the organisation does not become a victim of its own past success.
4. Be confident in your convictions
Finally, never lose sight of your fiduciary duties. It can be easy, particularly in large or well-established organisations, to become complicit in groupthink or to defer to management but, as a director, your foremost obligation is to the long-term health of the organisation. This means consistently applying a critical, independent lens to every decision, no matter how established or persuasive management’s recommendations may seem.
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