The average FTSE 350 chief exec has been in post only 4.6 years and even their FTSE 100 colleagues can only manage an average of 4.7 years in their current jobs, according to data from board analysis specialist BoardEx. That doesn’t bode well for their chances of having been in a similarly senior position the last time a real recession hit town, over a decade ago.
The problem is even more acute with NEDs, whose wisdom and experience might otherwise be expected to make up for any lack of the same amongst a firm’s executive directors. But their average time in the job is a mere 3.5 years.
Of course board tenure has been falling for years, as firms have come under pressure to display more diversity at the top, and activist investors and shareholder groups have encouraged a brisker turnover of senior execs to keep the growth coming. There is also anecdotal evidence that directors tend to be sidelined past the age of 65 or so, regardless of how effective they are.
But now that the prospect of growth for many firms has evaporated for the foreseeable future, the skill set and experience of their existing top team could well be found wanting. When times get tough, the simple psychological impact of having someone in a senior position who can say ‘I’ve seen this before’ is invaluable in keeping the other directors on an even keel and avoiding panicked reactions.
A bit of gravitas - and even a few grey hairs - can also be a tremendous advantage when communicating economic home truths to employees. Not to mention all the hard-edged skills that older bosses are likely to have picked up over the years, such as cost-cutting, downsizing and keeping a lid on unreasonable shareholder expectations. So the message to top teams everywhere is clear. To stand the best chance of surviving – even thriving – in the current economic climate, at least some of your firm’s directors should have a few miles under their belts.