Executive Advisory: Boards Benefit From Younger Directors

How Young Are Directors Today?

There is a common perception that the most successful board directors are predominantly older, white men. Historically, it is true that boards have been dominated by senior executives who have spent decades of their lives working in the corporate sector. The trend of older directors continues, likely because companies prioritize extensive experience and professional development as necessary for effective board governance.?

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Among directors at S&P 500 companies in 2023, the average age of diverse directors was 57.1, while the average age of non-diverse directors was 58.5. The average age of first-time diverse directors was 55.9, compared to an average age of 56.6 for non-diverse first-time directors. The average ages of these directors are higher than the previous year. While diverse directors are a bit younger in general, directors as a whole are getting older. Yet, the majority of the people in the workforce are millennials, aged 28-43. The unique perspectives and passions of young people have the potential to transform our world, so why are companies leaving them out of the boardroom?

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Why Should Companies Seek Younger Directors?

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Despite the recent increase in the average age of board directors, there are many benefits of having younger directors. Younger directors can bring fresh ideas and approaches that challenge the norms of board governance. Often, such changes are necessary to foster ingenuity and successful decision-making. Younger directors are also typically more acclimated to the technological nuances of the 21st century, including those related to artificial intelligence and social media. Such knowledge is crucial for companies that need help navigating an age of digital transformation. It is also important that companies care about reflecting their customer bases. Younger directors appeal to younger demographics, bridging the gap between a company and the people it aims to serve.?

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The life spans of modern companies are steadily declining and consumer preferences continue to move toward younger generations. Young people have a technological edge, unparalleled access to connection and collaboration and the closest proximity to future generations, making them uniquely positioned to drive change and innovation. Today, it seems crucial that younger directors are given more consideration when seeking board appointments. The future of many companies depends on it.