Note to the reader– We conducted an online google survey were we asked both millennials, those born between (1980-1996) and the older generation 6 key questions about the millennials in the boardroom, 217 people managed to respond. Below are the 3 key questions out of the 6 we asked:
1. Is generational or age diversity the missing link in the boardroom?
2. What are the main contributions we can expect from millennials in the boardroom?
3. What can be done to include millennials in the boardroom?
The remaining questions and responses will be shared in our next edition.
WHO ARE THEY?
The millennial generation, born between 1980-1996, is a generation that is shaping the world, work force, politics, and religions. The millennials have been making significant strides in challenging the status-quo and this has reflected immensely in the corporate world. Millennials are currently forming 50% of the world workforce. Their career passions, attitude towards work and knowledge of the modern technology will define the corporate culture.
Millennials are not content with working in rigid corporate structures. They demand rapid development, a work life balance and are always longing for constant feedback. In other words, millennials want a corporate culture that addresses their needs and makes available a supple working culture. One of the most outstanding mannerisms about millennials is their desire to move up swiftly through the organisation as well as their willingness to move on quickly if their expectations are not being met. This will likely present a challenge in the corporate world.
WHY YOU CAN’T AFFORD TO IGNORE THEM?
Per the United Nations Revision World Population Prospects of 2020, the millennials are forming 33% of the world population and are set to become the largest generation in the world. Millennials will form the greater part of our world. To the business community, the millennials will become the largest market. To the employer, millennials will become the largest pool of employees and to the society and corporate, millennials are set to become our leaders. In essence, millennials will shape our world. It will be very problematic to avoid dealing with millennials as they are to disrupt all the spheres of influence. It then becomes imperative to understand their traits and how organisations can attract and keep such talents.
It is not only the size of the millennial population that makes them a topic of discussion. The group has one of the most important key features that makes them outstanding – A High Educational Level. The millennials are the most educated generation of individuals, and the generation with most women who have higher levels of education. It is with education that transformation will be brought about by this generation. Millennials’ knowledge in technology clearly sets them apart. One of the defining characteristics of the millennial generation is their affinity with the digital world. They have grown up with broadband, smartphones, laptops and social media being the norm and expect instant access to information. This will result in bringing about improved decision making and digital transformation.
The education and size of the group makes it disconcerting for the millennials to be ignored not only as customers and employees, but as corporate leaders, that sit on boards with a mandate to bring about digital transformation, product development and sustainable use of resources.
ARE THEY THE MISSING LINK IN THE BOARDROOM?
The most important question yet to be answered is, ‘’Are the millennials really the missing link in the boardroom and why is it that despite their educational level and size of their population, their boardroom representation remains low compared to their counterparts?” Based on the survey we conducted, 60% of the respondents believe that millennials are the missing link in the boardroom, and the 40% think that millennials are yet to be fully groomed for the boardroom.
One of the executives we consulted voiced that most millennials do not make it to boardroom due to their job-hopping behaviors i.e. unattached to organizations and moving freely from company to company, more so than any other generation. This makes them unattractive board member candidates, as shareholders are not keen to appoint any person who is unattached to their company and is nomadic in nature. Another executive held that one of the crucial matters that need to be addressed before fully opening the entries of the boardroom to millennials is the issue of “rapid progression”. Most millennials demand rapid progression, resulting in them not willing to wait to grow through the ranks of the organisation. This may also negatively affect their tenure in the boardroom, as they may be short sighted, making decisions which could harm shareholder interests in the long term.
WHAT ARE THE MAIN CONTRIBUTIONS WE CAN EXPECT FROM MILLENNIALS IN THE BOARDROOM?
FIGURE 1.
Based on the survey we performed, most people concur that the millennials will address the following issues when represented in the boardroom:
- Improved identification of customer needs
- Product development
- Sustainable use of resources.
Most respondents trust that improved identification of customer needs will be the number one priority, followed by product development and lastly sustainable use of resources.
- Improved identification of customer needs and Product development.
As we have alluded before, the world population demographics are changing, and millennials are already the generation with the most population. This consequentially means that most markets and customer behaviours will be moulded by this generation. Quick evolution being one of the key attributes of this generation means markets, customers’ behaviour and taste are expected to change swiftly and such vicissitudes demand businesses to be on their toes, transforming at the same pace to avoid extinction of their business models.
This demands for 2 principal actions:
- Identification of customer needs
- Product development for the emerging markets
Who is the best person to execute these 2 actions?
- The person who is part of the millennials’ generation, who understands the rapidly changing needs of the world’s biggest markets in terms of biography.
Does the person have enough authority to exercise the freedom of executing the actions?
- In a company context, the important platform that can intensify the impact of the millennials in the business circle is inclusion in the boardroom, as it is a platform that affords them the opportunity to make and execute decisions that will not only support the survival of the organisation but also challenge the status quo.
The entrance of millennials in the boardroom will bring immense benefits to the board. The millennials have the knowledge already that will support in product development and digital transformation. With the effects of Covid-19 i.e. disruption of most traditional business models, it calls for board members to adopt an inclusive approach and include the millennials in developing new business models that address the ever-changing business environment. Furthermore, millennials will have a high probability of developing products that will sell. In view of that, they will be developing products for a market they both belong to and understand; hence they will be able to precisely identify customer needs and tailor product development to match customer needs.
2. Sustainable use of resources.
Although most respondents feel that sustainable use of resources is not a critical issue, it is somewhat one of the important subjects that millennials must address as it also affects their longevity in the boardroom as members since the going concern of a company hinges on the availability of natural resources. Natural resources are key assets in driving development and wealth creation. They must formulate ways that will result in proper management of natural resources i.e., meeting organisational goals while simultaneously sustaining the natural resources and ecosystem services on which the economy and society depend.
WHAT CAN BE DONE TO INCLUDE MILLENNIALS IN THE BOARDROOM?
FIGURE 2.
Per the responses received, we noted that use of mentorship programmes and a change in company policy and culture received the most responses having 48% and 34% respectively. Age quotas and appointment of board members without prior experience having the lowest response with 9% both.
Companies should adopt an inclusive approach as it is extremely imperative that millennials be included in the boardroom due to the dynamic, radical, and positive change they will bring.
- Change of corporate culture.
Change of corporate culture and policy on diversity is one of the most crucial factors towards an inclusive approach. Although the mentorship program has been selected as the most key factor, its effectiveness hinges on the willingness of the present board members to change the corporate culture. Mentorship programmes are rather a creation of change in a company’s culture. The challenge emanates from the fact that those who have walked the journey believe that maturity begats position. As we have alluded before, the reality is that market and customer behaviour is rapidly changing, and it is important that young people come on board. To change this view is not one man’s effort. Both the older and younger generation must take part in the transition.
The older generation must accept and trust that young people can make sound business decisions and take the companies to greater heights. In the same way, the young generation must walk the talk by displaying maturity and tact in engaging those at the board. To do that, they must foremost show competence and thoughtfulness in making decisions at lower levels. This goes a long way in making a swift cultural change which has support from both parties.
2. Mentorship Programs.
Mentorship programmes provide millennials with an opportunity to learn. There are 2 customs that the board can employ to ease mentoring of millennials and make the transition to the boardroom effective:
Training.
- Firstly, the entity must have a programme that helps in identifying and selecting young people within the organisation that have reflected traits of being effective leaders for grooming into becoming board members. The criteria of identifying a potential board member must be approved at board level, taking into consideration the inputs of the millennials within the company. The identified individuals must go under training. Considering that most board members are busy people, they may not have enough time to carry the responsibility of adequately mentoring and training the millennials concerning matters of the boardroom. The entity can make use of external trainers to train all the persons that would have been identified and selected for the boardroom mentorship programme. The matters discussed by the trainers will be tailored to make the trainees effective board members of the company, who will bring forward meaningful change. Currently, we have the Chartered Accountants Academy Business School that has rolled out a new programme that focuses on training board members on matters that affect the boardroom. Companies can make use of this offering and train the next generation; this goes a long way in creating an effective succession plan of the organisation. The energy, knowledge, and willingness of the millennials to learn is not a thing to ignore.
Sub-Committees.
- “Only in water can one learn how to swim” Unknown. To evaluate the effectiveness of the mentorship programme, the board needs to involve the millennials in the decision-making process. This can be done without essentially including the trainees in the boardroom. For instance, the board can be planning a certain business project. The board can share the same information with the trainees and allow them to decide as well. After a period, the board draws a comparison on the decision results of the trainees against the decision that the board has made. The board will evaluate the decision reached by the trainees, and weigh if they are in line with the vision and mission of the company and if it makes business sense. This gives the millennials a feel of the decisions that are made at boardroom level, which goes a long way in reducing the performance and expectation gap when the young generation is finally in the boardroom. This further supplies an opportunity for millennials to be trained, evaluated, and have feedback provided. This requires a lot of time; which businesses normally may not have. A great level of commitment will be needed.
3. Age Quotas.
AGE Quotas are a form of affirmative action or equal opportunity measure designed to address the slow pace of change in the participation of young and minority groups in areas of society where they are historically under-represented. Having an age quota would speed up the involvement of young people in the boardrooms. Quotas can however result in young people not being appointed based on merit but to fulfil the quota requirements. It is imperative that young people be trained, and leadership circles be created to nurture millennials as a more permanent solution to bringing diversity in board of directors. The author advocates that young people must not be appointed because of their age, but because of their qualifications and competences.
Conclusion.
Millennials are the future of organisations. They hold the power to bring about diversity and effect operational changes in organisations. They can influence a more receptive corporate culture and lead good corporate governance. Digital transformation has become one of the main goals of all organisations and this can be swiftly carried out and spearheaded by millennials in the boardroom. It is time for radical changes to be implemented in organisations as future success of organisations lies in the hands of millennials. Its now up to millennials to take up the stand and demonstrate both preparedness and commitment to lead organisations into greater heights