What are they and what do you need to think about to set one up?
As a big fan of Next Generation boards and greater generational diversity on boards for over 20 years it is encouraging to see their spread across the world and by sector, size and nature of organisation. The forces that lead to their creation seem to be intensifying but what are NextGen boards and how can you set them up for success?
What are they?
They tend to be advisory in nature and comprised of a diverse group of people from across the organisation. Diverse in many respects: in role, location, gender, ethnicity as well as social and other forms of visible and non-visible diversity and character.
The “NextGen” tag is gaining traction as many are created to engage and gain insights of younger generations. Some however are multigenerational and for this and other reasons they have other names including Horizon boards, Shadow boards and Challenger Committees.
They aren’t new and many have been in existence for some time including those at Gucci, the Financial Times and the EY Foundation where I would say (as the founding Chair from 2014 to 2023) that it has been a major factor in our success to date.
The driving forces for creation of NextGen have tended to include:
- The context of their formation. Typically the ambition or need for innovation or cultural transformation.
- The wish to engage and gain better access to the insights and ideas of those not already in the leadership group.
- The desire to provide a mechanism for constructive challenge of the boards or senior leadership team’s thinking.
- The recognition that increased generational diversity in relation to decision making leads to much more open and more creative discussions in and outside of the board room.
- To strengthen legitimacy with important stakeholder groups
- To provide an additional development opportunity for high potential colleagues; and
- Hearing about the benefits of them from a peer or Board member.
What do you need to think about to set one up?
Co-creation with a small group of potential NextGen Board members and learning from others who have NextGen boards are two ways of increasing the chances of success. High engagement from the CEO, engagement from the senior leadership team and clear communications are others.
Important practical things to think about include:
- Clarity of purpose and realistic expectations. Being clear about objectives and setting reasonable expectations, especially for the first cohort.
- How the interaction with the senior leadership team and board will work in practice.
- Whether you are going to appoint any NextGen board members to the Board or Board subcommittees?
- Size: Most NextGen boards tend to be 8-12 in size striking a balance between getting the range of perspectives required and an ideal sized group for good discussions.
- Selection: Many start with a talent spotting approach for the first cohort to establish it. Then move to an open process from the second cohort, engaging some of the first cohort in the selection process.
- Tenure: Two years is a common approach enabling the NextGen Board time to make a significant contribution as well as keep it fresh.
- Remuneration: Are you going to compensate NextGen Board members for the extra work and commitment that they will provide.
- Induction and Training: It’s important to invest in effective induction and training. Board skills, the ability to constructively challenge, managing conflicts of interest, conflict and cultural differences and confidentiality are usually as important as the knowledge aspects of induction.
- How to prepare the executive leadership and managers of those on the NextGen Board so that they maximise the benefits and are able to deal with the challenges.
- Who will provide the administrative support that the NextGen board will require.
- By thinking of the first cohort as the pioneering group and their term as the establishment phase how will you review progress, learn from the first phase and adapt for the second group.
In summary, if you’re going to do this and make the most of the opportunities a NextGen Board brings there’s a lot to think about and you have really got to put the effort in.