The directors & boards survey: director age and tenure: our survey respondents found it tough to generalize on issues of age and experience. Of greatest concern was the availability of qualified hoard candidates.

• Author: Shaw, David
• Position: Survey

AGE IS IN THE RYE OF THE BEHOLDER, and the be-holders in our survey on Director Age and Tenure tend to be older than our average survey respondent. Over the past seven years, our Directors & Boards surveys have been responded to by directors with an average age of 57-58. This survey, however, elicited an average respondent age of 65. Obviously, questions about age and tenure strike a chord among elder directors, and their age may skew some of the average results we obtained.

Another area that may skew our results is the mere fact of conducting a survey on age and tenure among directors. As one respondent commented: "It seems as if you are leaning toward that assumption [that directors are too old to deal with technological or global change] by the tone of this survey. Some board members, as people, are old when they're 25. Age should not be a factor. Accountability and performance should."

Age bias

Are the older board members responding to this survey trying to protect their prerogatives in their responses? The answer, from our survey, appears to weigh in this direction. Younger board members (under the age of 60) are more likely to be in favor of limited board tenures and mandatory retirement ages than those over 60.

Only 40% of older directors thought that boards should set mandatory retirement ages; 52% of directors younger than 60 want mandatory retirement ages. Similarly, younger directors were more likely to advocate for limited board tenures than older directors (31% versus 24%). This age bias continues when looking at the desired retirement ages and length of tenure among those younger than those older than 60 years: for younger directors, mandatory retirement age should be 71; for older directors, that age increases to 73 years. Board tenure should be limited to 10 years, say younger directors; 11 years is the number older directors would like to see. Interestingly, the institutional and individual shareholders who responded to this survey tell a somewhat different story. They're more likely to want see mandatory retirement ages (43%), but less likely to want limited board tenures (22%).

Age, experience and entrenchment

With age comes experience, and don't shareholders want experienced directors who have "seen it all"? Or does age hinder the board and company's growth and ability to anticipate change? As one respondent commented: "Anecdotally, it seems that the majority of 'failed' boards were comprised of older members who had...