The Boardroom Shakeup: Can Young CEOs Force Diversity and Innovation?

I was at an industry dinner in London recently and the conversation turned to the state of Boards today. The group was a even mix of men and women, all professionals from a variety of backgrounds, and most of a certain age (mine). Whenever this topic comes up, there is inevitably a collective sigh of disappointment that Boards are still overwhelmingly white, male and of a certain generation, despite all evidence that demonstrates that diverse Boards make for better, more profitable businesses. Some sectors are better than others, for sure, but finance, tech and consumer boards are still pretty homogeneous.

We may never see during my professional career a truly mixed board makeup, because biases are long ingrained and old habits (and networks) extremely hard to break. These things are uncomfortable, they raise tricky questions and they oftentimes rock the boat. All systemic change does. So it can seem a bit hopeless for those of us who agitate for change but see the same decisions being taken over and over.

A good number of my network have expressed the same frustrations lately; it seems as though the difficulties of last year have caused businesses to double down on tried and true and take less risk, which invariably means choosing the Board member who looks…familiar. Or not changing the Board at all. At least three of my friends, all seasoned non-execs, have been involved in searches recently where the role has been suspended.

Back to the dinner. I was really encouraged to hear that the experts around the table are seeing this upcoming generation of CEOs and Chairs reflect a new dynamic; one that questions the value of the Board status quo and which demands better. This isn’t just about diversity although that’s certainly a part of it. It’s about CEOs understanding that the Board can play a much more interesting role than simply governance; that an effective and supportive Chair can ensure that the Board’s skills are used to significantly enhance the company’s value. In fact, research by Intel shows that “…a majority of Gen Z — those ages 18 to 24 — in the U.K. would be hesitant to take a job from a company that does not have diverse representation in senior leadership roles”, so there’s reason to think this attitude translates to the Board as well.

I’ve had illuminating conversations with a good number of next-gen founders don’t always realise that it is they who need to shape the Board and ensure that it serves them and the management team, and it’s shape shouldn’t be dictated by the next big investor that comes along. In my experience, good investors demand a certain level of Board maturity from their portfolio businesses, with Boards that do have independent members with industry expertise (and no, I’m not just saying that because that’s the role I tend to occupy; I’m saying it because it’s true). So once the CEO has a bit more confidence about creating a Board with whom she has an actual dialogue rather than simply a reporting relationship, we will start to see change.

It sounds like that change is happening.