Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Graying corporate boards are getting lessons on how to foster the next generation of directors.
Younger directors remain rare but they’re increasingly in demand for their skills and perspectives on topics such as cybersecurity, e-commerce and marketing to millennials. They can also bring diversity to otherwise “pale, male and stale” boardrooms.
“One thing investors are pushing heavily is for boards to be more diverse in thought, gender, race and age,” T.K. Kerstetter, founder of Boardroom Resources LLC, told Bloomberg BNA. “Age is the newest one put in there.”
Kerstetter’s board education platform launched late last month a new initiative with Nasdaq and executive search firm Spencer Stuart called Next Gen Board Leaders. The project is meant to help boards learn how to recruit and assimilate younger, often first-time directors.
Directors have gotten older amid rising retirement ages. Over the past decade, the portion of S&P 500 company boards with an average age of 59 or younger has been cut roughly in half while those with an average age of 64 or older have nearly doubled, according to Spencer Stuart’s most recent board index. Boards in between, with average ages of 60 to 63, have stayed at about the same portion between 2006 and 2016.
That’s not because of a lack of demand for younger directors. “We are seeing boards interested in younger directors,” particularly when they’re looking for experience in technology and other areas that older directors might lack, Julie Daum, who leads Spencer Stuart’s North American board practice, told Bloomberg BNA.
But Daum said “boards have slow turnover, so you’re not going to see quick change because of that.” Conversations about turnover are changing though as boards think more about refreshment and rely less on retirement, she said.
With a potentially decades-wide age gap between sitting directors and incoming directors, making new board members feel welcome and bringing them up to speed on their new roles becomes even more important. One thing that can help is having a “board buddy” that can act as a mentor for a new director, Caroline Tsay, a 35-year-old who sits on the boards of Morningstar Inc. and Rosetta Stone Inc., told Bloomberg BNA.
“I think sitting board members expect that you can participate from day one and know what’s going on,” she said, likely because many of them have been on boards before. This year, S&P 500 boards have seen the biggest influx of first-time directors since Spencer Stuart started tracking such data.
Next Gen Board Leaders says too many boards lack effective on-boarding practices for new members. So that’s one of the issues Tsay and nine other public company directors in their 30s and 40s will tackle as part of a first-of-its-kind advisory council. The council, which met for the first time June 27, will swap stories and share tips on opportunities and obstacles that current and aspiring board members of younger generations face.
To contact the reporter on this story: Andrea Vittorio in Washington at email@example.com
To contact the editor responsible for this story: Yin Wilczek at firstname.lastname@example.org
More information on Next Gen Board Leaders is available at https://nextgenboardleaders.com/
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)