Corporate boards aren't known for being young and tech savvy, but that could be changing

Last year, Sean Gourley got an email from an acquaintance: Would he be interested in joining the board of a $30-billion oil and gas company? The 36-year-old had never sat on a public board before, and had no particular knowledge of the industry. He had just left his first company, the data analytics firm Quid, and his second was still taking shape. Still, the physics PhD flew from San Francisco to Houston to interview, and, in September 2015, took a seat on the board of Anadarko Petroleum.

“They wanted someone with a familiarity of data analysis and a more quantitative approach,” Gourley tells Quartz. “So much of business has become very data-driven. … A lot of [companies] are smart enough to realize they need that knowledge.”

Tech-savvy 30 and 40-somethings have become prized in boardrooms because they have something the S&P 500 desperately needs: insight into how companies can exploit digital technology. Software and internet-driven change is transforming most industries, and the bosses at America’s biggest corporations, for whom the average age is about 57, have struggled to keep up.

Fresh faces are rare on corporate boards. The average S&P 500 board member is 63.1, about two years older than a decade ago, reports SpencerStuart, an executive recruiting firm. That’s made corporate leadership is increasingly out of step with the business landscape around them, said Susan Stautberg, CEO of WomenCorporateDirectors. In the 2000s, “people began to see the impact and the cost of falling behind on technology,” she tells Quartz, and the search for tech-focused directors began.

The boardroom search for young tech talent took off after Clara Shih took a spot on Starbuck’s board in 2011. The then 29-year-old engineer had started her own social-media startup after rising through the ranks of Silicon Valley’s top companies, and Starbucks needed help as Facebook and Twitter gained influence. Now, major companies have hired a wave of tech-oriented directors under the age of 50, reports SpencerStuart and BoardEx.

The rush to appoint board members with accounting experience after the 2002 Sarbanes-Oxley Act offers some parallels. Since 2003, the number of S&P 500 boards with a financial expert has risen from 21% to 100%. Technology board members decades younger than their colleagues may become the norm. Companies’ wish list for the next generation of board members reads like a mirror image of today’s business environment, SpencerStuart found, with technology expertise second only to finance.

Bringing a new generation—especially one known for its rejection of traditional business hierarchy—into the boardrooms of America’s old-line corporations has its difficulties

Gourley arrived at Anadarko with a deft touch for big data. He wanted to apply Silicon Valley’s analytical approach to a 57-year old company that specializes in drilling and shipping natural gas. Learning about a sector that his new colleagues had worked in for decades was “one of the hardest things I’ve had to do,” said Gourley. “Everyone else is a whole lot older than me, you could say they are definitely from another generation,” he said. “But they also have a large amount of experience that I don’t have. I’m very conscious of that.”

Gourley’s primary role is to look at how the company can apply new data analytics tools. “When the time comes, they expect you to know what’s what, and push back about what you’re doing with this technology,” said Gourley. “You need to be able to call bullshit when needed, and share your experience.”

To be effective, he’s had to break down barriers to get better information by talking with employees intimidated by his role. “The way people of my generation do management, it’s comparatively very, very flat and informal compared to a lot more formal management at these other companies,” said Gourley.

But the education has been a two-way street, and Gourley has seen many things Silicon Valley firms could learn from more staid corporations. The knowledge of financial instruments, capital markets, global logistics for massive projects, and negotiating with governments were among the most important. “Silicon Valley wishes it could do all that,” he said. “We are very, very naive at some level with our usage of those tools.”

Companies may be tempted to simply recruit a director from a flashy technology company, and call the problem solved. That would be a mistake, says consulting firm McKinsey. “For one thing, there aren’t enough of them to go around,” the firm reports. More importantly, digital knowledge and experience “must go beyond one or two tech-savvy people.”

And that’s where corporations really need to improve. Only 5% of public boards in the US have a designated technology committee, while Fortune 100 companies aren’t much better at 15%.

Short of having a full committee, companies can’t risk not having tech expertise at the board level.“I would say that it will be very rare in five years time not to have someone like this on the board of a major American company,” said Gourley.

A broader cultural shift is farther off, though.

“Before I got there, they told me, ‘This final bit you may not like, but you’re going have to wear a suit and tie. We’re a little old-fashioned,'” said Gourley, who broke out his suit for the first time since arriving in Silicon Valley several years earlier. On arriving at the first meeting, dressed as advised, board members were surprised.

“‘What are you doing wearing a suit?’ they asked me,” said Gourley. “‘We thought you’d give us a chance a to loosen up.” Though he still wears a suit to meetings, Gourley said he’s “working on changing this one.”