Directors Show Youth, Too

Directors Show Youth, Too

By Joann S. Lublin

Clara Shih, a social-media entrepreneur, took a board seat at Starbucks Corp. in December—at the ripe old age of 29. Former first daughter Chelsea Clinton became the youngest director at Barry Diller‘sIAC/InterActive Corp. in September, when she was just 31.

The appointments illustrate a surprising trend. While most U.S. corporate boardrooms remain a bastion of white men with gray hair, companies eager to stay on top of hot technologies or facing pressure from activist investors are choosing more youthful directors.

“Boards are looking for the next generation of leaders who understand the digital marketplace,” says Nels Olson, co-leader of the CEO and board practice for Korn/Ferry International, a major search firm. “Over the past 18 months, we have seen a noticeable increased interest in finding such board members.”

Between 2008 and 2011, 100 people aged 31 or younger joined the boards of public companies, according to an analysis for The Wall Street Journal by Institutional Shareholder Services, which advises investors on how to vote in corporate elections. Executive recruiters and older directors say such board members offer a fresh perspective, high energy and fluency with new technologies.

Ms. Shih runs Hearsay Social, which helps companies use social media. She believes being a technologist and the youngest Starbucks director “will help me bring a fresh perspective to the board,” which sought her out for her social-media expertise and new ideas.


Many youthful directors land seats because they represent key stockholders. Samuel Merksamer, a 31-year-old investment analyst for billionaire Carl Icahn, won a Dynegy Inc. board seat last June after being nominated by Mr. Icahn, a large minority investor in the ailing power generator. He was already a director at Federal-Mogul Corp. and two other companies where Mr. Icahn owns sizable stakes.

As the youngest Dynegy director, Mr. Merksamer concedes he has less general experience than most board elders, but he says he brings nearly a decade of restructuring know-how. and “the willingness to think creatively.”

It’s a similar story for Mr. Icahn’s son Brett. He got the first of his four seats in 2007, when he was just 27, becoming a director of American Railcar Industries Inc., where his father was the majority owner and chairman. By the time he joined the board of Take-Two Interactive Software Inc. in 2010, he had managed Icahn Group’s investment in the videogame maker for almost four years.

“We put individuals on the boards at companies where we have very large positions who spent many hours studying these companies,” Carl Icahn explains. That “helps them be good directors.”

Vadim Perelman, a hedge-fund manager who joined Tix Corp.’s board last summer at age 28 after threatening a proxy fight, believes youth doesn’t have to reduce a director’s effectiveness. Some 30-year-old directors “do a fantastic job of building shareholder value,” he says. “And there are 60-year-old directors who consistently destroy it.” Mr. Perelman runs Baker Street Capital LP, which is Tix’s biggest investor.

G. Mason Morfit, a partner at activist hedge fund ValueAct Capital, found he was the only Facebook user among directors of Valeant Pharmaceuticals International after joining the board in 2007 at the age of 31.

His Facebook page came in handy when merger talks between Valeant and Biovail Corp. repeatedly broke down in 2010. One frosty impasse left both sides “frustrated and fatigued,” he says. The ice was broken when one of Biovail’s directors sent Mr. Morfit a “friend” request. The request “helped thaw out a frosty situation,” Mr. Morfit says. Talks resumed, and the companies merged in 2010.

Ms. Shih isn’t the only young director with extensive Internet expertise. Joseph Levin had handled numerous takeovers and spinoffs for IAC before the Internet media holding company named him CEO of its Mindspark Interactive Network unit in November 2009. Mindspark makes apps for online personal expression, games and fitness.

Mr. Levin, 28, when he took his first of three public-company directorships in early 2008, still serves on the boards of Active Network Inc. and Inc., an IAC spinoff that operates lending websites. He says executives recently used his input before deciding to handle online marketing in house because “I have been on both sides of that decision.”

Write to Joann S. Lublin at

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