A new generation of corporate board members is filling the seats of departing gray hairs—making the boards younger and more diverse.
Key Details
- The Great Resignation—a rush of early retirements that happened during the pandemic—has helped usher in a new generation of board members.
- The average age of a U.S. board members has gotten younger over the last three years, reversing a decades-old trend of rising ages.
- Bloomberg ESG data shows that the average age of directors in the Russell 1000 dropped from 62.5 in 2019 to 61.8 in 2022.
- The average tenure of directors dropped from 8.7 years in 2020 to 7.9 in 2022.
- S&P 500 companies with mandatory retirement policies decreased from 70% in 2018 to 67% in 2022.
- The Harvard Law School Forum reports that board diversity increased from 10% in 2019 to 16% in 2022.
Why it’s Important
The fresh blood offers new opportunities for innovation and diversity as younger, more culturally in-touch staff take the reins of power and start having more sway over the direction of these companies.
“The changes are occurring as baby boomers hasten their exodus from the workforce and companies pursue replacements who are younger, more diverse, and who can contribute expertise toward emerging issues like cybersecurity” and environmental, social, and corporate governance, says Bloomberg.
“For many companies, the departure of tenured directors provided an opportunity to replace experience with new skills.”
With the demands for greater diversity and representation, the numbers show that corporations are responding to calls for more women and people of color in the higher echelons of authority.
Backing up a Bit
As we previously reported, companies are struggling to hold staff as a result of the ongoing “great resignation,” as thousands of employees leave their jobs for greener pastures. Employees have the power and bravery to walk away from a job that isn’t working for them.
Even as companies struggle with staffing issues, opportunities are arising for young and diverse employees who have more options and opportunities as the older generation leaves work in the post-COVID era.