At a time when organizations need technical expertise on their boards more than ever before, companies are increasingly looking for younger, more digitally-savvy directors, Quartz’s Michael Coren reports:
Fresh faces are rare on corporate boards. The average S&P 500 board member is 63.1, about two years older than a decade ago, reports SpencerStuart, an executive recruiting firm. That’s made corporate leadership is increasingly out of step with the business landscape around them, said Susan Stautberg, CEO of WomenCorporateDirectors. In the 2000s, “people began to see the impact and the cost of falling behind on technology,” she tells Quartz, and the search for tech-focused directors began.
The boardroom search for young tech talent took off after Clara Shih took a spot on Starbuck’s board in 2011. The then 29-year-old engineer had started her own social-media startup after rising through the ranks of Silicon Valley’s top companies, and Starbucks needed help as Facebook and Twitter gained influence. Now, major companies have hired a wave of tech-oriented directors under the age of 50, reports SpencerStuart and BoardEx.
The rush to appoint board members with accounting experience after the 2002 Sarbanes-Oxley Act offers some parallels. Since 2003, the number of S&P 500 boards with a financial expert has risen from 21% to 100%. Technology board members decades younger than their colleagues may become the norm. Companies’ wish list for the next generation of board members reads like a mirror image of today’s business environment, SpencerStuart found, with technology expertise second only to finance.
Companies may be tempted to simply recruit a director from a flashy technology company, and call the problem solved. That would be a mistake, says consulting firm McKinsey. “For one thing, there aren’t enough of them to go around,” the firm reports. More importantly, digital knowledge and experience “must go beyond one or two tech-savvy people.” And that’s where corporations really need to improve. Only 5% of public boards in the US have a designated technology committee, while Fortune 100 companies aren’t much better at 15%.