Millennial workforce drives governance changes
Social and environment issues are set to drive the future of governance as millennials begin to assume a larger proportion of the workforce, according to research by ICSA: The Governance Institute
28 Sep 2018
Over 400 company secretaries and governance professionals contributed to the research, which compared the answers of millennial and generation Z respondents (aged 18-35) with respondents aged 56-65.
The main findings show that 81% of all respondents believe legislation or other political action will be relevant to how concerns about environmental sustainability influence governance in the future, and 87% believe that overlapping or conflicting regulatory frameworks are a feature of globalisation that will impact governance in the future.
However, while 84% of generation Y/Z think technological change is highly likely to cause significant governance challenges, only 70% of established practitioners agree.
Half (48%) of generation Y/Z think environmental sustainability is highly likely to cause significant governance challenges compared to a quarter (27%) of established practitioners.
Similarly, 71% of generation Y/Z think financial inequality is relevant to governance compared to 62% of established practitioners. Two thirds (69%) of generation Y/Z strongly agree that the level of scrutiny experienced by organisations will increase in the future compared to 61% of established practitioners.
ICSA policy officer Liz Bradley, author of the report, said: ‘Millennials expect organisations of all types to play a part in dealing with economic, environmental and social challenges ̶ not just the organisations that would typically address these issues.
‘Given that millennials will make up roughly 75% of the global workforce by 2025, organisations ignore their views at their peril.’
Overall, the survey found 42% of respondents think that insufficient time and resource to deal with the volume of applicable regulation will be the biggest obstacle to effective internal oversight in the next 10-15 years.
Peter Swabey, policy and research director, ICSA, said: ‘It is clear that generation Y/Z governance professionals believe certain issues are more pressing than is currently appreciated by those in senior positions with greater levels of influence.
‘If they are correct, this potentially leaves organisations at risk of being blindsided by social developments, left behind by their competitors or subject to more regulation in response to shifting public sentiment.
‘If governance professionals feel that the increased willingness of governments and regulators to use mandatory reporting requirements and legislation to tackle issues such as diversity and remuneration is unhelpful, organisations must show politicians and the public that they can effectively address issues of concern without legislative intervention.’
Report by Pat Sweet