Finding young blood for boards is a priority for sitting directors but despite that, only 6% of board seats are occupied by individuals who are under 50.
Of the S&P 500, only 43% (217 companies) have a younger director and for 50 of those companies’, the younger director is also the CEO, according to a PwC report titled Board Composition: Consider the value of younger directors on your board released Tuesday.
The study found age to be the most important diversity issue facing boards, rising above gender and race. But that hasn’t translated into an influx of young directors into the nation’s boardrooms.
“It’s a very narrow population,” points out Paula Loop, Governance Insights Leader for PwC. “Not a lot of people retire at 50.”
But, she added, there are sitting executives who are managing to balance their full-time job and the 200+ hours public directors spend in a year of board service, according to data from the National Association of Corporate Directors.
When directors under 50 do get onto a board of directors, Loop found their committee work to be particularly interesting. While those directors were underrepresented on committees like audit and compensation, they were overrepresented on public policy, technology and sustainability committees.
Women make up 31% of younger directors, a step up from the regular stat of 22% directors across all S&P 500 companies.
The report also noted that if the company had a younger CEO, the board was more likely to bring aboard a younger director. However, directors still said they were more likely to look for a newly retired executive when looking for a younger director.
Loop says she expects the numbers of younger directors to rise in the future.
“A lot of these companies that have younger directors on the board reported that they increased the board size to accommodate them,” she says. “Because it’s that important to them, they decided not to wait for a director to retire or reach a term limit.”
Read the entire report here.