In the push for board diversity, investors simply want to know that boards have the right mix of skill sets, backgrounds, and perspectives to address the emerging strategic issues that all companies face. As customer data, cybersecurity, and digital marketing become increasingly critical to today’s organizations, boards are reaching out to younger directors to ensure they have the right generational perspectives to advance their products and services into the future. Age is quickly becoming a diversity focus, and institutional investors are lining up in support.
At CalSTRS, we understand and look for boards that reflect diversity in a multitude of ways. One vital way is in age diversity and tenure, because we believe that an effective board should have both short- and long-tenured directors to ensure that fresh perspectives are provided and that experience, continuity, and stability exist on the board. Ultimately, it comes down to what supports the creation of long-term value for shareholders.
Boardroom Resources in partnership with Spencer Stuart and Nasdaq has just launched Next Gen Board Leaders, a new community designed to highlight the value young directors can bring to emerging areas of board oversight and strategy. Julie Daum, Leader of Spencer Stuart’s North American Board Practice, and Caroline Tsay, 35-year-old board member with Rosetta Stone and Morningstar, join host TK Kerstetter to discuss what Next Gen Board Leaders hope to achieve within the corporate board landscape.
At the core of this new community is the Advisory Council, a group of ten public-company directors in their 30s and 40s. This diverse group of board members recently met in New York City for the first-ever Next Gen Board Leaders “Mini-Summit,” which allowed them to swap experiences and discuss governance topics through a generational lens.
“If you’re a director joining at age 35, and your board has a retirement age of 75, chances are you don’t want to serve on that board for 40 years – nor is that productive for the company,” said Daum. “It changes the dialog that boards are going to have around board turnover.”
Board tenure, onboarding, shareholder engagement, committee structure, technology & innovation – these are just a few of the topics that will be explored by this group of next-gen directors throughout the year.
I think [Next Gen Board Leaders] will also spawn a conversation and generate awareness around board leaders and how they think about incorporating new board members like us. I also think it forces a change in the way that you think about a board member’s role and their contribution across the board.