Friday, Jul 3rd 2020

Corporate boards in the millennial age

Commentary

This week, Match Group (the online dating platform that owns Tinder, Hinge, OKCupid, among other apps) appointed actor Ryan Reynolds to its Board of Directors.

Just weeks before, actress Emma Watson was appointed to the board of Kering, the European luxury conglomerate that owns Gucci, Balenciaga, and Yves Saint Laurent.

These appointments are unconventional to say the least, but we believe collectively point towards a broader and long-overdue shift in what investors are looking for in corporate leadership.

For context, boards of directors are meant to oversee the high-level strategic directions of their respective companies, and play a key role in major decisions like executive pay and CEO selection.

Historically, corporate boards at large enterprises have tended to look very homogenous. Board directors have tended to be older, often retired business leaders with decades of experience in their respective industries — even if that industry is entirely divorced from the company they hold a directorship at.

Obviously, there’s business rationale to having experienced leaders who can offer decades of experience, insight, and connections “on board.”

However, stacking a corporate board solely with individuals whose primary value-add is business expertise can leave little room for creativity, diversity, and inspiration — and it’s clearer today more than ever just how critical those qualities are to driving successful, durable enterprises.

While it remains to be seen whether Ryan Reynolds or Emma Watson will make good board directors, we believe it’s likely that more companies in the future will look outside small circles of corporate executives for board appointments, which should bode well for corporate stewardship as a whole.

The world is no longer looking for record players; it’s looking for the next iPhone. And in order to do that, businesses will need more diverse, out-of-the-box perspectives, which needs to start at the top with the way companies approach executive appointments and leadership.

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