Before setting up Future Directors Institute we spoke to, and surveyed, hundreds of aspiring and existing board directors, of all ages. A common response to our concept of age diversity on boards contained the words "too inexperienced".
Where is the proof that experienced means better? What does experienced even mean?
Admittedly this was not a surprise. The status quo for most boardroom appointments seems to be the need for decades of professional experience - the facts speak for themselves. The average age of company directors in Australia is 60, there are pretty much no ASX100 company directors under 40, so of course we'd get that reaction from both camps. Most aspiring young directors lack confidence to go for it, plus many older directors are blinkered by the way the world is (not what it could be).
However, where is the proof that experienced means better? We have no control experiments where shadow boards run the same companies. We only have what is. What we have is a mix of great boards and awful boards, successes and failures. But, what we also have is increasing proof that diversity at any level leads to better outcomes. Gender is rightly the main diversity topic, but it also stretches to culture, background, skills plus increasingly mindset.
What does experienced actually mean anyway? Knowledge and skills gained over time. But how much time, what is the magic cut off point? Which experiences count more than others? Is a 20 something entrepreneur with a long list of business successes (and failures) less worthy than a 60 something executive who's been in the same company for 40 years? If you think yes, you need your head examined. If you say no, perhaps you are right. Perhaps the answer is, "we don't have enough information to make that decision, yet".
Many older board directors have very little experience in what increasingly counts these days; sustainability, digital, CX, social media, even 'change'. I've heard directors say (often with their tongue nowhere near their cheek) that they are digitally experienced because their teenage child uses an iPad. It's disturbing.
Experience can also breed complacency. Sometimes when you've done something one way your entire life you will not even entertain the idea of doing it a different, potentially better way. With all the problems our world faces, we could do with a bit of critical thinking.
Perhaps I'm asking the wrong question. Experience does count. But, perhaps experienced doesn't need to mean a long time.
What do organisations and their stakeholders really need from boards in the 21st century? Yes, boards are about governance, strategy and accountability but to be effective it takes patience, integrity and open communication, and the acceptance of new ideas.
To be clear, Future Directors Institute is not advocating a clean sweep of boards replaced by younger directors. We advocate for extra diversity. Diversity is a good thing for decision-making. New ideas and approaches, different opinions and experiences. Yes, it's perhaps harder to manage but the outcomes are proving to be far more effective, and successful. Isn't that the role of the board?
Paul Smith, co-founder and CEO of Future Directors Institute, helps empower and connect the next generation of board directors. He is Chair of the Jane Goodall Institute Australia and a director of several start-ups. To learn more about the Future Directors Institute and how they are helping hundreds of next generation leaders make an impact in the boardroom, visit www.futuredirectors.com.au