Trends in board recruitment: board diversity, now including generational diversity, will continue to be high on the director recruitment agenda.

• Author: Shaw, David
• Position: SPECIAL FOCUS: BOARD RECRUITMENT IN 2017

The recent presidential election has created potential changes in the nature of board service, especially on the regulatory front. But a few things won't change in terms of recruiting for new board positions. These include the drive toward increasing diversity on public company boards, the need for new and unique skillsets on the board, and a growing move toward generational transition on boards.

To review these continuing trends in board recruitment, Directors & Boards spoke to David Chun, Founder and CEO of Equilar, and Judith M. von Seldeneck, Founder and Chairman of Diversified Search. These two experts represent the perspectives of a board intelligence service and a search firm, respectively.

Gender, Ethnic and Generational Diversity

Board recruitment needs have been changing over the past decade, driven by a focus on gender and ethnic diversity. And while the pace of increased diversity on boards has been slower than some have desired, it has been consistent.

"This is what investors want," says Equilar's David Chun. "There's a lot of research that shows diverse boards lead to better financial outcomes, and that different points of view lead to better decisions. It's a real hot button with our clients, and organizations such as The Business Roundtable would like to see boards become more diverse."

"Diversity is even more important in today's environment," agrees Diversified's Judee von Seldeneck. "It's not only the right thing to do, but a board has to be reflective of the population. Not understanding the diversity of the consumer market is going to hurt corporate strategies for the future in terms of not understanding that constituency."

There's another type of diversity that boards now face--and that's bringing in younger board members. For the past decade, Directors Boards Magazine's research has shown the average age of a director to be firmly pegged in the late 50s. But as desired director skillsets have begun to change, and more boards institute term and age limits, the need to recruit younger board members with direct experience in these areas has grown.

Equilar's Chun sees this among his clients. "Boards are looking to bring on generational diversity, and millennials with the right skills can be great candidates," he says. "We've seen an increase in younger directors. In our database, there are 767 board members under the age of 40 who serve on at least one public company board, and there are 4,400 directors between the ages...