Boardroom diversity — or the lack of it — has become a hot button issue for organizations as they face growing pressure to better reflect their workforce and wider society.
Until now, that conversation has centered largely on gender and race — where much work remains to be done. But, increasingly, age is also becoming an important metric of representation.
A new report, released this month by the Center for Creative Leadership (CCL), indicates that diversity of behavior, brought about by varied age groups, will be crucial for any boards hoping to tackle future-focused issues like technology and sustainability.
And millennials will be central to that.
The case for millennial board members
By 2020, the 20 to 39-year-old generation will account for half of the global workforce, according to the World Economic Forum. At the same time, they will bypass their predecessors, Generation X, as the leading global consumer group.
Yet today, boards remain disproportionately dominated by senior executives. The average age of S&P 500 board members today is 63, with just 16% of new appointees aged 50 or younger.
The issue is not lack of scope for younger board members. John Ryan, president and CEO of CCL, told CNBC Make It it’s a common misconception that millennials are too young for board positions. He said some of his greatest board hires have been young people.
But he noted that more people need to throw their hats into the ring.
Why join a board
Boards are responsible for driving a business forward, while ensuring it adheres to the correct rules and regulations, and acts responsibly toward its employees, stakeholders and society.
The business case for board diversity has been well-documented. From presenting new perspectives to exposing blind spots, various studies suggest diversity in age, gender and race can correlate to profits.
It can also bring huge benefits for individuals. Aside from financial compensation, board membership can provide a powerful opportunity to learn and make an impact on issues that matter to you.
“Serving on a board is one of the most influential roles millennials can take in order to have impact,” Kiran Aziz, EY attorney, wrote for the World Economic Forum last year.
How to get started
Of course, earning a seat on a board is no easy feat, and only the most competent candidates will be accepted. But Ryan noted that the best entry point is “to start.”
“You don’t really know something until you practice it and live it,” said Ryan. “So any board that you can get on that you would have a passion for, or you could learn a lot from, is beneficial.”
That could mean applying directly for a corporate board position. Or — possibly better for newcomers — starting with a not-for-profit board, which can provide a great opportunity to learn about board leadership while giving back to an important cause.
“There are so many not-for-profit boards that are starving for people with the interest, the intellect, the experiences and the passion,” Ryan continued.
“Then, when you go in and you want to be on a for-profit board, they say ‘oh okay, he or she has been on a non-profit board, I like the values, I like the fact that she’s doing that, and she knows how boards work.’”
Know what you’re signing up for
Although board membership can provide a great opportunity for self development and to push the corporate agenda on important issues, it’s important to be aware of what you are signing up for before jumping in.
Commitments can vary widely depending on the organization and your level of expertise. However, in a study by Stanford Graduate School of Business, directors reported spending an average of 20 hours per month on board matters, while a typical meeting lasts between two and six hours.
As well as the increased responsibilities, board membership typically also comes with potential liabilities. Depending on the business and jurisdiction, shortcomings can result in personal fines and, in extreme cases, criminal convictions.
Ryan noted that it’s therefore important to do your due diligence on the company and make sure your interests are aligned before committing to anything. To help with that, he recommended thinking about the five Cs: Be committed, canny, careful, connected and courageous.
“When you get interviewed, you should be interviewing them because it’s got to be a win-win situation,” said Ryan. “You’re not going to join a company where they have values that you just don’t agree with. Don’t go into it with your eyes closed.”
Source: CNBC – make it