There's a new kid on the block when it comes to corporate governance considerations for money managers: millennials.
This group, broadly defined as those born between 1980 and 2000, is on the list of considerations for money managers and consultants when considering investment portfolios — and also for the boards of the companies they invest in.
"Shifting demographics has brought diversity issues to the forefront, and this is now top of mind for executives and corporate boards," said Deb DeHaas, vice chairman and national managing partner of Deloitte's Center for Board Effectiveness in Chicago.
She said while there has been significant emphasis on the more traditional aspects of board diversity for a number of years — such as gender, race and ethnicity — "there's a new interest in the mix of skills, experiences and unique qualities that millennials possess. This combination can help bring an alternative perspective needed to facilitate strong performance to defend against new and emerging challenges," Ms. DeHaas said.
And for good reason: The World Economic Forum's most recent Global Shapers Survey for 2017 said 50% of the world's population is younger than 30.
Yet an analysis by Pensions & Investments of Bloomberg data showed that 13.2% of board members of U.S. and Western European companies were at or under the age of 40 as of the end of 2017, compared with 12.5% at the end of 2012. Further, 0.2% of companies had an average board member age of 45 or under as of Dec. 31, 2017, unchanged compared with the end of 2012.
Data for 2017 represented about 1,900 companies, while 2012 data represented about 1,600.