In a nation celebrating the extent and size of its youth every other day, there is at least one place where the proportion of young people seems on a decline.
Data suggest Indian companies are less inclined than before to appoint young people to their boards. The number of people named to the board of directors of Indian companies since 2006 who were 25 years or younger at the time of appointment add to 552. And, the current number of directors below the age of 25 is no more than eight, according to data from indianboards.com, which maintains figures on the composition in this regard of companies listed on the National Stock Exchange.
“While some of them would have crossed the age of 25, others might have ceased to be directors. At least one thing is very clear, however, that the number of fresh appointments of directors who are less than 25 years has drastically come down. This can be attributed to greater public scrutiny on the composition of a board of directors,” said Pranav Haldea, Managing Director at PRIME Database Group, which manages indianboards.com.
There has been greater scrutiny over the composition of the boards of Indian companies, with questions asked about the ability and qualifications of those appointed. Corporate governance experts said age need not be a barrier to a board seat but ability should be given preference, rather than ties to the promoter.
“Those below 25 don’t necessarily have the experience to fill that role…unless it is an internet or technology company in which the person is there as an innovator… Generally, a director is less likely to be capable if he is related to the promoter,” said Amit Tandon, managing director of Institutional Investor Advisory Services India Ltd.
“Appointing a relative is not a problem if the person is qualified. Communication is easier and it might be easier to work together. But appointing a person only because he is related to the promoter is not a good practice. Some of these directors also draw disproportionate salaries, Many promoters appoint directors to help maintain a majority on the board. Others bring on the next generation as a means of grooming them,” said J N Gupta, founder and managing director at corporate governance firm Stakeholders Empowerment Services.
Among the youngest directors is Shashwat Goenka, who at 23 years is serving as director of Firstsource Solutions. He has worked with Nestle and KPMG, having graduated from The Wharton School, University of Pennsylvania. He has a bachelor’s degree in economics, with a specialisation in finance, marketing and management.
Goenka is among the most qualified of his peers in the ‘25-and-below’ bracket of directors and doesn’t think his life is too different from an average person his age. “To be honest, everyone my age is working, and working really hard. I really enjoy my work and for me, it is a relaxing activity! In fact, I look forward to going to work every morning,” he said.
“Till now, my contribution to the company has been limited. But I hope to be able to contribute to the best of my abilities…We have a good team in place, and we work very closely — I have learnt a lot from them.”
With all the 25-year-olds out of the picture, the average age of a director is 59 years, nearly a senior citizen. The largest proportion are in the age group of 46-60, accounting for nearly a third (32.87 per cent) of the directors. Those between 61-69 years make up another 20.3 per cent. Those between the age groups of 36-45, 26-35 and 70-80 years are between two and 13 per cent.