Embracing Age Diversity: The Rise of Younger Independent Directors in Indian Companies

Why Indian Firms are Seeking Young Independent Directors

The corporate landscape in India is witnessing a marked shift in the age demographics of independent directors. Top leadership consultants such as Russell Reynolds, Heidrick & Struggles, and Native highlight an increasing demand for age diversity on company boards, with a noticeable inclination towards directors in their 40s to mid-50s. This change is sparked by the desire to complement the wisdom of senior board members with the specific expertise of the younger generation in areas such as technology, cybersecurity, material science, and ESG (Environmental, Social, and Governance).

Catering to Younger Market and Employee Demographics

Pankaj Arora, Managing Director at Russell Reynolds Associates, articulates that this shift in the age requirement for independent directors is largely driven by the younger demographics of consumers. Progressive companies are realizing that in order to maintain a strong connection with their target market, board demographics need to reflect this shift. This trend is not just limited to consumers; a younger director can also better relate to a younger employee base.

"If the average age of the company's employees is 25-30 years and if there is no one on board who can relate to such a crowd, the board's ability to understand the issues on the ground will be limited," states Arora.

Balancing Age and Skills: The New Normal

Despite the rise in demand for younger directors, industry experts insist that age alone cannot be the decisive factor for board inclusion. According to Vinita Bali, former Managing Director of Britannia and an independent director on several boards, "The lens should be skills and competency and the willingness to devote adequate time to board responsibilities - and not age."

Varun Sidana, Partner Corporate Functions Hiring at Native, agrees, stating that the ongoing transformation in digital and ESG sectors is creating demand for younger directors, but emphasizes that this demand is primarily skill and knowledge-based.

Looking Ahead: Board Diversity and Inclusion

Current data from Native shows that the average age of a board of directors in India is between 60-65 years. However, with over 800 independent directors set to retire by March 2024, a shift towards younger directors seems inevitable.

Suresh Raina, Partner at Heidrick & Struggles, confirms this trend: "The acceptance of younger directors is much higher now, being driven by the market dynamics. Five years ago, conversations with companies about hiring directors in the 40s age bracket would be few and far in between, but we see that changing."

As Indian companies continue to evolve, the trend towards younger independent directors will likely solidify. Ultimately, the successful integration of age diversity on boards relies not solely on the age factor but rather on a careful balance between age, skill, knowledge, and experience.

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