Age Diversity on Corporate Boards — is it a Case of Old Fogeys vs Upstarts?

Diversity and inclusion are topics of our time in discussions about corporate governance.

There’s been significant progress in gender and racial diversity on boards, but age remains a relatively unexplored frontier.

It’s an important issue, with regional variations, potential benefits, and a fair share of challenges. Each generation has its own perspectives, shaped by life experiences, historical contexts, and cultural influences.

Younger people typically show a deep understanding of emerging technologies, digital trends, and evolving consumer preferences. Those things are essential for staying ahead in an evolving business landscape. Their older colleagues bring to the table a wealth of knowledge, experience in navigating complex business cycles, and institutional memory. Both sides provide valuable insights for strategic decision-making.

Research supports the notion that age diversity enhances corporate performance. A study published in ResearchGate found that boards representing multiple generations tend to outperform those that don’t. A PwC survey backed that up, showing a positive correlation between age diversity and long-term financial outlook.

Challenges and Barriers

Despite the potential benefits, achieving age diversity poses real challenges. Ageism, whether conscious or unconscious, can lead to the knee-jerk reaction that younger candidates lack experience — or that older ones are resistant to change. Traditional recruitment practices prioritise established networks and individuals with extensive experience, potentially overlooking emerging talent. When boards favour seniority and experience above all else, it can be hard for younger directors to live up to their potential.

Global Perspectives

Different regions exhibit varying approaches to age diversity. In North America, progress has been made in terms of gender equality and diversity — but the age factor remains a challenge. Many boards still opt for executives in their 50s and 60s, with relatively few younger members joining the team.

European countries have been more proactive in this area. In Norway, for example, quotas for younger directors have introduced. But generally, challenges remain in overcoming traditional recruitment practices.

In many Asian countries, respect for seniority and experience is deeply ingrained in corporate and society culture. This alone makes it difficult for younger people to ascend to board positions. But things are changing, as companies begin to recognise the value of generational diversity.

A Roadmap for Change

There are several effective strategies to foster age diversity. By actively seeking out candidates with diverse backgrounds and expertise, new recruitment channels open up, expanding networks and fostering partnerships with organisations that focus on developing young leaders.

Mentorship and sponsorship programmes introduced at an early stage can support the professional development of younger directors, providing them with guidance, opportunities for growth, and, eventually, access to senior leadership.

Fostering an inclusive culture that values diverse perspectives and encourages can open dialogue and collaboration across generations. This creates opportunities for informal interactions, promotes active listening, and recognises the potential of novel contributions. Term limits and staggered elections help to create opportunities, while ensuring continuity as well as generational knowledge transfer.

Diversity, in all areas, is a crucial component of forward-thinking companies. By embracing a multi-generational approach, a broader range of perspectives, experiences, and skills is ushered in.

It’s time for companies worldwide to recognise the value of both lived experience and the ingenuity and enthusiasm of youth — and take proactive steps to benefit from the full spectrum of talent on hand.