Hoodies and Brandy
I recently returned from California where I had fabulous meetings with some fabulous companies. One meeting in particular stood out.
I was providing risk management advice to a rapidly growing technology company. When I arrived for the meeting, I was greeted by the CEO and chairman of the board. I confess I did a double-take: In front of me was a very young man, sporting a “man-bun,” wearing a grey hoodie and flips flops.
Maybe it was my East Coast corporate conservatism? Maybe I was not cool enough to fully appreciate the West Coast carefree attitude? Maybe I’ve been too conditioned to how a board chairman should appear?
Most of us have been groomed to think that once we served our time in a C-suite and near retirement that it is only then we get the time-honored privilege to join a board and coast through retirement imparting our vast knowledge and experience with a cigar and brandy in hand.
So when my new friend complained how old he felt to be the board chair at age 28, I couldn’t help but chuckle. Being years his senior it pained me to hear that.
But after hearing his company’s numbers, soon to be a $100 million in revenue company in only a few years, I felt less pain but much pride, proving that age and freshness can in fact be a great asset.
It has been long argued that a lack of diversity on boards, long tenure and inadequate board composition create a risk that boards will lose independence from management.
The idea of diversity and inclusivity is very much part of our national discourse today. But what my encounter helped me frame was that we tend to think of diversity as a proper blend of gender, race and abilities.
We seem to speak less about having a mix of age groups representing us.
The fundamental purpose of a board is to guard investors’ and consumers’ interests. The board should reflect those who fuel and support your company — the customers and the society it serves.
Having too many like-minded people, the same age, who come from the same background, can lead to a blind groupthink that can fail to hold management accountable and ask tough, pertinent questions.
It was no surprise when I recently read a “Financial Times” analysis of data by the shareholder advisory group ISS Analytics that showed U.S. boards are “maler, staler and frailer” than their European counterparts.
The analysis said these directors, on average, are less independent-minded. It is no coincidence that shareholders of Chipotle Mexican Grill, recently plagued with a series of food safety problems, blamed a stale, insular board of directors for failing to move fast enough to address problems.
If I learned one thing from my recent meeting, it’s that 20 is the new 40. Push aside some of the brandy and cigars. Make room for the hoodies and flip flops.&