Diversity in the corporate boardroom continues to be the topic of many conversations, conference panels and studies. However, the diversity of ages within each corporate board had not been analyzed until this report.
80 Percent of S&P 500 Boards Have Average Age in 60s; Little Difference By Company Size and Industry.
Recent Director Turnover Has Not Resulted in More Age Diverse Boards
NEW YORK, NY (March 21, 2017) – A new report finds that there is little age diversity within the boardrooms of S&P 500 companies. The new analysis also finds that the median average age for all boards is 62.4 years, and that the average is persistent across companies by size and industry segment. While technology firms do have the youngest average board age, with a median of 61.3 years, it is barely a year less than the median of all S&P 500 firms. In all, some 80 percent of boards have an average age in the sixties.
The report’s key findings include:
There is little dispersion in the average age of directors between different S&P 500 company boards. The median average age of all boards was 62.4, and 80 percent of boards have an average age in the sixties. Fewer than 2 percent of S&P 500 boards have an average age of more than 70 or less than 55.
Within individual boards, more than half (55%) of the S&P 500 boards have only three decades represented on their boards, most commonly directors in their fifties, sixties and seventies. Only 5% of S&P 500 companies have directors from five or six different decades serving on their boards.
In general, board age diversity does not vary significantly by company size or by industry segment. However, boards in the Information Technology industry have the most age diverse boards (a standard deviation of 8.1 years), while Utilities companies have the least age diverse boards (standard deviation of 6.1 years). Information technology firms also have the youngest average board age, with a median of 61.3 years, but that is only about a year younger than the median of all S&P 500 firms. Real estate firms boast the oldest average board age, with a median of 63.4 years, a year older than the index median.
Companies which have been publicly-traded for more than 50 years have the least age diverse boards (standard deviation of 6.5 years, compared to the index average of 7.2 years).
More director turnover, as measured by the number of director changes made between 2014 and 2016, did not result in more age diverse boards in most cases.
The vast majority (77%) of the directors studied with tenures over ten years joined their respective boards when they were in their forties or fifties.
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