Good morning,
“Shadow boards” are on the rise, but don't be alarmed.
A shadow board is a committee of typically younger employees who come together within a firm to advise the management team on key topics, such as company culture, product marketing, trends in technology, and sustainability efforts. They are not an official board, of course, but their views often supplement those of experienced, much older corporate directors and C-suite leaders.
Shadow boards appear to be catching on right now, possibly because they can support companies at a time when significant shifts—climate change pressures, a growing labor movement, and expectations that companies respond to social issues—make it important for leaders to remain in touch with youth culture. What’s more, these advisory groups give some businesses insight into their customers’ tastes and passions. As such, companies like the Body Shop and Mövenpick Hotels & Resorts have embraced the trend.
The Body Shop was inspired to create its shadow board of advisors, who are all under the age of 30, when it became aware of the gap between the company’s youngest workers and its leadership team and directors, Fortune’s Orianna Rosa Royle recently reported. “We had the realization that, if we’re lacking the voices of young people [on our board], how can we really honestly say, we’re building a business that we can pass down to the next generation?” said Chris Davis, board member and international director of sustainability at the company.
Nick Studer, CEO of Oliver Wyman, a consulting firm within the Marsh McLennan group, also created a shadow board—called the “global leadership team council”—that advises the company’s management team. Studer introduced the idea after taking the helm in 2021, having seen various versions of the structure work for several of his corporate clients, he explains.
He says that the diverse council members, who are all beneath the partner level and therefore generally younger than their mid-thirties, or hold non-consulting roles in the firm, regularly share perspectives that are more helpful to the CEO than those of the senior management team. “They are absolutely more open-minded, more challenging than the executive committee,” he says. While senior executives might be hesitant to raise obvious questions and risk looking uninformed, he adds, “The younger group, they’re just more feisty.”
A pair of management researchers from Switzerland’s IMD business school who studied shadow boards wrote in the Harvard Business Review last year that companies leveraging them can more effectively test projects and products important to younger employees and customers. They're also better able to create cohesion in multi-generation workspaces. Other corporate board experts tell Fortune that working with shadow boards allows directors and senior management to identify future leaders, while the shadow board members who engage with actual boards gain exposure to the mysterious world of corporate governance. It can be a win-win.
But businesses that have worked with shadow boards say the undertaking requires robust planning. Davis at the Body Shop advises companies to set out clear guidelines for the work that young employees on these committees will be expected to do. Otherwise, he told Fortune, the group could be exploited “as a kind of internally free consultant.”
Leaders and boards also have to take the shadow board seriously and give it real heft by sharing real information and implementing its best recommendations, Studer says. At Oliver Wyman, employees must apply for the role, and those chosen must sign detailed non-disclosure agreements before they start their one-year term, because they’ll soon be viewing and weighing in on all of the same presentations given to the senior management team.
To lead inclusively, Studer insists, you “have to be willing to give up power.”
Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan
