A new report has found that ASX 200 boards are becoming younger – a trend that is being echoed in the leadership of Australia’s law firms.
“In just five years, the number of Directors on ASX 200 Boards aged 60 years or over has dropped to just over half (57%) from almost three quarters (75%),” the report said.
According to the report, “Younger directors bring more diversity to boardrooms and add value by thinking differently around new business challenges including constant change, increasingly sophisticated retail channels, data collection and storage, and potential threats of cybercrime.”
This change is also reaching the boards of law firms.
At Maddocks, for example, the average board member age is 48 years. Maria Marshall, partner and board member, said that as firms’ partnerships become increasingly diverse, boards are diversifying to reflect this.
“One of the challenges that face a lot of law firms at the moment is the fact that you’ve got a large cohort of baby boomer partners that have been in place for a long time that are in the process of thinking what to do next, but are still probably occupying a lot of senior positions in firms,” said Marshall. “If you’ve got a board that is made up of those kinds of people, then they’re inevitably going to make different decisions.”
Dr George Beaton, chairman of Beaton Capital + Consulting, observed that more younger board members are the result of “generational change and a push by the younger guard to better reflect the future”. While there is value in the fresh ideas offered by younger board members, he expressed concern about the naivety of less experienced members and the loss of institutional memory is a real concern.
Despite being a new and younger board member, Marshall said she’s learnt a lot from senior board members and as a lawyer who has been at Maddocks her whole career, she still has a fair amount of intuitional knowledge to draw from.
“Although I’m a new board member, I’ve actually been working at the firm since I was a first year,” she said. “People who are in their mid-40s have been in the firm for 20 years.”
In her view, while a board of predominantly older people is not ideal, neither is a board full of young people. “I think the perfect position is to have a combination of different demographics so you get really rigorous debate going on about particular issues,” she said.