Young directors vital to ensure businesses thrive well into the future

Kirsty McManus, IoD

By Kirsty McManus, National Director, Institute of Directors (IoD) Northern Ireland

We often talk about the need to increase diversity on our boards as a means to create improved corporate governance and better businesses.

This discussion can be dominated by a call to increase representation from women and those from ethnic minority backgrounds – each of which are incredibly important – but raising up more young directors is also hugely beneficial.

Youthful business leaders can bring with them renewed entrepreneurial energy, fresh ideas and, for businesses eager to fasten their succession planning, are a necessary addition to senior management.

According to consultancy firm Spencer Stuart, the average age of company directors and board members in the UK is rising.

In its 2018 UK Board Index, the firm reported the average age of company directors in the leading 150 firms to be 59, which it said continued an historical trend of aging boardrooms.

Some analysts have suggested that around a fifth of company bosses will soon reach retirement or need to be replaced.

The age profile is more or less in line with most other major economies and there are of course significant advantages in having older directors in terms of the experience and knowledge they bring to the table.

In contrast, companies in some European countries such as France, Italy and Norway are becoming more youthful in a bid to help them tackle new technologies and issues like cybersecurity.

The benefits to having young directors in the senior management team stretch beyond their tendency to be more digital savvy, however.

Any new demographic will bring a different perspective to decision-making and where young people are concerned, they also represent the largest part of the workforce.

Greater boardroom diversity generally will impact on an organisation’s ability to attract and retain staff and customers, particularly younger people.

Perhaps most of importantly at all, young directors are virtually a necessity for businesses as they seek to put in place succession plans that will see the organisation continue to flourish long after its current executive leaders have retired.

Moving into senior leadership can be a daunting prospect however, both for the emerging director and the organisation itself.

The Institute of Directors in Northern Ireland supports the development of youthful leaders through the Young Directors Forum, made up of executives aged under 44, representing private, public and voluntary organisations.

With the forum aiming to provide a support network that will assist young directors and emerging leaders in growing their businesses and developing their own skills, the common theme is that they are committed to their own professional development and enjoy making new business contacts.

Regular events, such as a recent evening hearing from Belfast godfather of punk Terri Hooley allow forum members and others to learn best practice, network with like-minded individuals, discuss issues of concern to their contemporaries and access high-quality professional development.

Our flagship Young Directors Conference, which is regularly attended by more than 150 business leaders will take place once again this October.

This, and other initiatives that can encourage young people to move into director’s roles and improve the skills of those already in senior leadership, can ensure our boardrooms and businesses grow in diversity and allow organisations to thrive well into the future.

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