Millennials will start getting corporate board positions between now and 2025 — but it might not be as lucrative as it used to be

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• Australians millennials may be increasingly sought after to serve as board directors as large companies grapple with future-focused ethical and social issues, the Governance Institute of Australia has suggested.

• Millennials are expected to make up three quarters of the workforce by 2025 and Governance Institute CEO Megan Motto told Business Insider Australia "progressive boards" should be looking to include more young Australians.

• The average board director makes $52,551 per annum, but the Governance Institute expects pay conditions to come under more and more scrutiny.

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Serving as a board director of a major listed company has traditionally been one of the most sought-after gigs in the business world — and now millennials might be getting a larger slice of the pie.

Research conducted by the Governance Institute of Australia, off the back of interviews with top executives and a major survey of 33,000 businesspeople, has found a number of changes are heading for corporate boardrooms, including the age of the occupants of those luxurious leather seats.

"There will be more millennials on boards and they are likely to place greater emphasis on ethics and social good than on ensuring risk systems and structures are in place," the Governance Institute said in its Future of the Governance Professional report, released on Tuesday.

"They will also potentially be less rigid in their understanding and style and keener to push the envelope."

Governance Institute CEO Megan Motto told Business Insider Australia you can safely assume the number of millennials sitting on corporate boards in Australia is "still quite low", but that will likely change soon.

"It is projected that millennials will make up three quarters of the workforce by 2025," Motto said. "Any progressive board with a strong long term strategic focus should be looking at how they are working to bring millennials on board by then."

The digital prowess of many millennials makes them well-suited to sitting on boards, Motto said, as well as their passion for consumer rights.

But whether their more advanced boardroom colleagues will welcome them with open arms is another story.

Australian boardrooms are not known for diversity, with just 23.2% of positions on the top 500 ASX-listed companies being occupied by women.

"We need to look at how we can assist millennials in making the move to the boardroom," Motto said.

"This isn’t just in terms of training them as individuals, but in training the existing board members that will need to welcome them ... Unconscious bias is always a problem, and it's important that no one feels marginalised or ostracised."

In addition to gender, race and sexual diversity on boards, Motto says there needs to be a focus on "cognitive diversity" — welcoming members with different perspectives on issues — and that millennials bring that to the table.

The gravy train is slowing down

For millennials looking to secure a board gig, there is plenty of upside.

The average member of a company board of directors in Australia makes $52,551 per annum, according to the latest figures — which is a tidy sum when you consider most board appointments are far from a full-time role and involves attending as few as eight meetings per year.

And that's not to mention the social status, networking and career advancement opportunities that can come with a corporate board appointment.

But while serving on a board works out to be a pretty attractive hourly rate, unfortunately for those millennials with corporate ambitions, the party may well be over soon.

Executives surveyed by the Governance Institute said that growing consumer frustration with executive pay is also extending to board directors.

"Scrutiny of both director and executive pay is likely to rise," the report said. "Governance professionals may have to lend their legal expertise to help simplify long-term and short-term incentive plans, which are becoming more complex and may not be achieving what they are meant to."

On the flip side, while pressure on board director pay is likely to increase, there will also be more board positions up for grabs, with the report predicting that a growing number of organisations will need to have formal boards of directors.

"Super funds are already having to lift the bar on their governance, but by 2025, more not-for-profits and organisations managing large pools of money will be required to do the same," the report said.

"More small to medium-sized entities will also embrace governance as they become aware of its many benefits and as they grow in size."

The report also found that 9% of executives surveyed are "not prepared ... to face the governance challenges of 2025" and 33% have done "some preparation".

Little wonder they are turning to the millennials.