Age diversity in the boardroom

PwC’s census of board directors 50 and under

Board diversity continues to dominate many institutional investors’ agendas—and with good reason. Directors and investors largely agree that it results in greater diversity of thought. But age diversity doesn’t attract the same attention, nor is it thought to be as critical as other forms of board diversity. According to PwC’s 2018 Annual Corporate Directors Survey, only 21% of directors consider age diversity as very important—a stark contrast to the 46% who say the same about gender. And we see this reflected in boardroom composition.

Why does this matter? Boards that have added younger directors find that they bring new skills and perspectives. Directors of different ages have different approaches and views of the marketplace. Bringing on younger directors may be particularly important as millennials, who now represent over 35% of the workforce1, are poised to replace baby boomers as the largest living adult generation this year2. Our report guides you through an examination of who the younger directors are, the value they can bring to a board and how to find and recruit them.

Why should boards consider adding Younger Directors*?

*Younger directors or Directors 50 and Under: corporate board members in the S&P 500 aged 50 and under

They bring new skills:

In addition to finance and investing experience, almost one-third of Directors 50 and Under bring expertise in technology. And of the younger corporate board members who joined S&P 500 boards in 2018, an even greater percentage had technology backgrounds. This often means experience with digital transformation and data and analytics, which can help boards oversee new opportunities and challenges, and drive company growth.

They are current:

Most younger corporate board members are actively connected to the business world on a day-to-day basis. In turn, they are more likely to work with millennials and are closer to their experiences. This perspective helps boards better connect company strategy with the behaviors and priorities of millennial and Gen-X consumers and workers.

They increase board diversity:

People of different ages simply see issues and challenges differently, and a board without a younger director will be missing that distinctive outlook. Younger directors bring diverse, and increasingly non-traditional, backgrounds and skills to the table. Additionally, increasing age diversity seems to have a positive impact on achieving better gender diversity in the boardroom.

OK. So, who are the Younger Directors?

They are increasingly female:

37% of the total population of Directors 50 and Under are women—up from 31% in 2017. This is much higher than the S&P 500 overall average—where women comprise 24% of board seats. 

Not only that...

More than half of the new independent Younger Directors, elected to a S&P 500 company board in 2018, are women.

They are (mostly) independent:

They (most likely) work in one of three industries:

Financial services, information technology and the consumer discretionary industries supply more than ⅔ of independent Directors 50 and Under.

Recruiting Younger Directors: where to start?

Finding and recruiting younger board members can be difficult. Many of the obvious candidates are in high demand, putting pressure on the nominating and governance committee to have patience and also think outside the box.

Download our report for more insights about age diversity in the boardroom, where to find younger corporate board members and how to recruit them onto your board.

About the Census:

To compile the Census, PwC analyzed the population of corporate board members aged 50 and under serving on boards of S&P 500 companies as of December 31, 2018. Unless otherwise noted, all findings in this report are based on PwC’s analysis of information available through BoardEx’s director database as of December 31, 2018, Equilar’s BoardEdge tool, ISS Analytics, SEC filings, company websites and other publicly available information. All industry classifications are in accordance with the companies’ Global Industry Classification Standard (GICS) codes.

Significant year-over-year changes*:

*These are the largest shifts from 2017 to 2018. See report for full year-over-year comparative data.

 

Footnotes:

1Larry Fink’s Annual Letter to CEOs, January 17, 2019.
2Fry, Richard. “Millennials projected to overtake Baby Boomers as America’s largest generation.” Pew Research Center, March 2018

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Paula Loop

Governance Insights Center Leader, PwC US

Sharad Jain

Partner, Governance Insights Center, PwC US

Deidre Schiela

Partner, Governance Insights Center, PwC US

Paul DeNicola

Principal, Governance Insights Center, PwC US

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