Over the last few years, companies have faced increasing pressure from shareholders, governments, regulators, employees, customers, and other stakeholders to improve their records on boardroom diversity.
The current state of Board diversity
The UK Spencer Stuart Board Index pulls together information on the top FTSE 150 companies over the previous 12 months. For 2022 it reported the average age of a director to be 61.1 years old. Auto Trader and DarkTrace had the most directors under 50 at 44%.
The importance of diversity at Board level
The importance of diversity at Board level, is fundamentally about diversity of perspective and thought. Here are three reasons why diversity of age is an important part of creating a diverse, well-rounded board:
- Different ages or generations bring different experiences to the table. This helps boards to better understand the needs and expectations of different generations of stakeholders, such as employees, customers, and investors.
- Age-diversity also supports better decision-making. Younger board members may bring fresh ideas and new approaches, while older board members may have a wealth of experience and institutional knowledge. By combining these different perspectives, boards can make more informed and well-rounded decisions.
- Age diversity can also help to promote a culture of inclusivity and openness. When boards include members from different age groups, it sends a message about the value of diversity to that organisation. This can help to attract and retain a diverse pool of talent, which in turn can lead to better business outcomes.
Overall, age diversity on boards is important because it can lead to better decision-making, a more inclusive culture, and a better understanding of the needs and expectations of different generations of stakeholders.
