In a rapidly evolving business landscape, the structure of a company’s board of directors holds top importance. With Millennials and Gen Z now comprising a substantial portion of the global population, their perspectives, aspirations, and unique attributes are increasingly indispensable in shaping a successful and forward-looking organization.
Businesses need to reflect the generational makeup of its current and future customers and this should also be reflected in the board. Right now, the average age of S&P 500 board members are 63 years old, while in the FTSE 100 is 57.
Currently, Millennials are between 27 and 42 years of age and Gen Z’s working age ranges between 18 to 26. In 2022, roughly a third of newly appointed CEOs in the S&P 500 were younger than 50 years old and an EY survey showed that nearly half of Gen Z respondents said that they are extremely likely to start a business, showing that these generations are ready to break out on their own as leaders.
Organizations that want to reflect the company and society at large must review the diversity of voices they have in the boardroom – and that includes the often-overlooked diversity of age. Generational differences mean that many Millennials and Gen Zs may not have the traditional career path or experiences of an older candidate, but that fresh perspective should be considered as a potentially huge value add to the overall board composition.
A shift in priorities
Millennials and Gen Z are steering away from conventional success metrics. While previous generations might have primarily sought financial rewards, Millennials and Gen Z place importance on meaningful engagement and alignment with a company’s values and mission. In the boardroom, this shift is crucial because it translates to a deeper commitment to the organization’s purpose. Directors who share the company’s values are more likely to make decisions that align with its long-term vision, fostering a sense of unity and purpose throughout the organization.
The Millennial edge
Millennials, with their unique blend of digital fluency and collaborative spirit, bring a distinct advantage to the boardroom. Having grown up during the rise of the internet, they possess a profound understanding of how technology can disrupt industries and drive innovation. This advantage translates into informed discussions about digital strategies, cybersecurity, and leveraging data analytics to make informed decisions.
Millennials’ collaborative nature also promotes a more open and communicative boardroom environment, where diverse perspectives are valued and where decisions are made through consensus-building.
The Gen Z advantage
Gen Z, having grown up in the era of rapid technological advancement, brings a natural affinity for innovation and digital literacy to the boardroom. This is pivotal in the digital age, where companies must continuously adapt to stay competitive. Gen Z’s tech-savviness can lead to fresh perspectives on how to take advantage of emerging technologies, streamline operations, and enhance customer experiences.
As board members, their insights can drive revolutionary strategies that keep the organization ahead of the curve.
Flexibility and adapting to change
The demand for flexible work arrangements is a characteristic of Millennial and Gen Z priorities. This flexibility is essential in the boardroom, where directors are required to navigate complex challenges and adapt to shifting market dynamics.
Workers are now putting more value in flexible working than ever, and according to Bloomberg Intelligence (BI), 73% of office workers in London have said that they would quit their current jobs if flexible working was taken away.
It’s these flexible working priorities that Millennials and Gen Z possess that can not only pivot strategies when necessary and effectively steer the company through uncertainty, but also ensure that workforce retention is high. Their agility and willingness to explore new avenues can lead to more resilient and adaptive organizations.
Millennials and Gen Z seek workplaces that offer a sense of purpose and allow them to make a meaningful impact. When these individuals become board members, their commitment to the organization’s mission translates into decisions that prioritize long-term sustainability, ethical practices, and societal contributions.
This purpose-driven leadership not only aligns with the expectations of modern customers but also resonates with employees, fostering a culture of purpose and commitment throughout the company.
Inclusivity and social responsibility
Both Millennial and Gen Z generations emphasize social responsibility and inclusivity.
In the boardroom, this emphasis can lead to decisions that promote diversity at all levels of the organization and enhance corporate social responsibility initiatives. Directors who prioritize inclusivity are more likely to champion diverse perspectives, leading to richer discussions and well-rounded strategies. Their commitment to social responsibility can also elevate the company’s reputation and attractiveness to socially conscious consumers and investors.
A culture of innovation
The addition of Millennial and Gen Z talent brings a culture of innovation into the boardroom and beyond. These generations have grown up in an era of constant change, and their openness to experimentation and willingness to challenge the status quo can invigorate board discussions.
In turn, this culture of innovation can permeate the entire organization, inspiring employees at all levels to explore new ideas, embrace change, and contribute to the company’s ongoing evolution.
The integration of Millennial and Gen Z talent into a company’s board of directors is a strategic imperative with a multitude of positive outcomes. Their unique priorities, technological acumen, commitment to purpose, and focus on inclusivity can reshape the boardroom dynamic and be the motivation for positive change throughout the organization.
By recognizing the value of these generations and harnessing their potential, companies can ensure they remain agile, innovative, and aligned with the evolving expectations of employees, consumers, and investors alike.
To find out how we can reshape your board of directors, get in touch now.