Companies looking for Tech Talent picking younger Directors

Independent Directors are increasingly shortlisted based on their knowledge of new-age technologies like digital, artificial intelligence, and cybersecurity. The understanding of environmental, social, and governance issues has also become a key qualification that companies are looking for.

In the past year, there has been a rise in the appointment of first-time independent Directors who are younger and chosen for their expertise in new-age skills, according to top Board members and advisory firms. Data from Prime Infobase shows that in 2023, 830 first-time Independent Directors were appointed, up from 776 the previous year and 518 in 2019 before the pandemic. The average age of these Directors has decreased from 59 to 53 years.

Companies are now looking for Directors with skills in digital, AI, data mining, and other tech-related areas. There is a growing trend of selecting first-time Board Directors based on their knowledge of AI or ESG. This shift in the hiring process is evident in the replacement of retiring Directors, where companies seek individuals with different skills and experiences. A significant number of Independent Directors in National Stock Exchange-listed companies are set to retire by March 2024. The average age of Directors in these companies is 58.6 years. There is a shortage of Directors with expertise in technology and other modern skills. Executives in full-time roles are seeking special approval to join non-competing Boards, contributing to a decrease in the average age of first-time Directors. While the Board’s primary role is to contribute to strategy and risk management, companies are increasingly seeking Directors with a good understanding of technology, although not necessarily deep technical expertise. Boards also want Directors who can relate to the younger employee and customer base, as their perspective is valuable in understanding on-the-ground issues.