March 24, 2023

Gen X: Finally Getting Validated

At the risk of the boomers telling me to “get off their lawn” and millennials asking, “what about us?” – I’d like to flag a study from three assistant/associate professors at the University of New Hampshire that says Gen Xers have left their “slacker” stereotype behind in the boardroom and are associated with significantly better company performance. Here’s more detail:

Our analysis indicates that the percentage of Gen X directors on the board is significantly and positively related to firm value. We use several econometric techniques to address the concern that this effect could be driven by a simple age effect or by other director and firm characteristics correlated with the likelihood of having Gen X directors on the board.

Furthermore, we shed light on the potential channels through which Gen X directors could be influencing company performance. First, we find that firms with Gen X directors make value enhancing investments in corporate social responsibility (CSR). Second, we document that male Gen X directors facilitate the inclusion of women on the board which ultimately leads to better firm performance. Lastly, we find that Gen X directors are especially valuable for firms that engage in knowledge-intensive activities.

The usual caveats apply here – the data is backward-looking & has already aged (although the data set goes through 2017, that feels like a lifetime ago…how are these companies doing today?). As someone “on the cusp” and not clearly a member of any specific generation, I have no real dog in this fight. The point is that for one shining moment in time, Gen X is the MVP. Let’s allow them to relish it.

Liz Dunshee