A “Shadow” Board of Directors: Shed Light On Your Company’s Best Future


growing popularity of the shadow board of directorsIn many industries, market conditions move fast. Businesses that don’t have their ears to the ground can quickly get left behind. That’s just one reason why some of today’s savviest companies are establishing so-called “shadow” (or “mirror”) boards. A “shadow” board of directors compose of younger, non-executive employees who are on the front lines of changing tastes and lifestyles.

Generational Change

Millennials have been flooding the workplace for years now. This generational population of people were born between approximately 1981 and 1996. Following close behind them is Generation Z, those born around the Millennium and now coming of age a couple of decades later.

Despite this influx of younger minds and ideas, many businesses are still run solely by an older board of directors. While packed with experience and wisdom, older boards of directors might not stay closely attuned to the latest demographic-driven developments. This includes hiring, product or service development, technology, and marketing.

A shadow board of young employees that meets regularly with the actual board (or management team) can help you overcome this hurdle. Ideally, the two boards mentor each other. The older generation shares their hard-earned lessons on leadership, governance, professionalism and the like.  On the opposite end, the younger employees keep the senior board abreast of the latest trends, concerns and communication tools among their cohort.

Other Benefits

You also can tap the shadow board of directors for their input on issues that directly affect them. For example, would they welcome a new employee benefit under consideration or regard it as irrelevant? Similarly, you can use the board to “test drive” strategies targeting their generation before you get too far down the road.

And your shadow board can serve as generator of new initiatives and innovations, both employee- and customer-facing. Some companies with shadow boards have ended up overhauling their processes, procedures and even business models based on ideas that first emerged from the younger employees’ input.

Another benefit? Shadow boards can keep traditionally job-hopping Millennials from jumping ship. Many are eager to get ahead, often before they’re equipped to do so, and they don’t hesitate to look elsewhere. Selecting younger employees for a shadow board sends them the message that you see their potential and are invested in grooming them for bigger and better things. It also facilitates succession planning, a practice too many businesses overlook.

The Right Approach to Your Board of Directors

Don’t establish a shadow board just for appearances or without true commitment. That can do more harm than good. Younger generations see lip service for what it is, and word will spread fast if you’re ignoring the shadow board or refusing to seriously consider its input. When done right, this business innovation can pay off in the long run for everyone involved. Our firm can help you further explore the financial and strategic feasibility of the idea.