Not yet in the driver’s seat but hungry for change, millennials are lobbying to shape the way the companies are run.
What do North Korea’s Supreme Leader Kim Jong-un, Finland’s Prime Minister Sanna Marin, United States Congresswoman Alexandria Ocasio-Cortez and Facebook co-founder Mark Zuckerberg have in common?
They are all captains in their fields. And they are all millennials.
Widely defined as those born between 1981 and 1996, the collective term “millennials” has long been an oft derision-loaded byword for the younger generation. Australian property tycoon Tim Gurner famously said millennials could afford homes if they gave up their $19 avocado toast (a mistaken assertion, if Gurner actually did the maths).
Yet, millennials are now grown up; the oldest turns 40 this year. The youngest age group in the workforce is Gen Z, or zoomers.
Controlling the climate change conversation
Is it a coincidence that millennials’ top priorities, such as climate change and rising inequality, are also becoming those of the world? Or is it because they have reached critical inflexion points?
Not so. Global warming, for example, was already reaching uncomfortable levels years ago. Former US Vice President Al Gore’s documentary on the topic, An Inconvenient Truth, was released in 2006. Yet, in the same year, Bill Gray, a hurricane expert and an atmospheric science emeritus professor, claimed that the Earth would start cooling again in three to eight years. Even as late as 2012, James Inhofe, US Senator and former chair of the Senate’s Environment and Public Works Committee, published The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future.
Indeed, that climate change would be taken seriously was not a foregone conclusion. But millennials have less vested interest in the status quo than the generations before, with more impetus to steer the conversation in the right direction.
However, most millennials are still in middle management. From 2005 to 2019, the average age of Fortune 500 and S&P 500 CEOs rose by 14 years to reach 57. As of 2020, just 6 per cent were under 50.
People are living and working longer. And those between 75 and 80 move faster, are stronger and have higher cognitive abilities than those in the same age bracket 30 years ago, according to a Finnish study. Good news for humanity, but for millennials not yet in charge of the power levers, directing events means having to get creative.
One way is to invest differently from their parents, with ESG (environmental, social and governance) issues being a major concern. A 2019 Morgan Stanley Institute for Sustainable Investing survey of high-net-worth investors found that 95 per cent of millennials were interested in sustainable investing.
Some are taking a step further: using litigation. In 2018, Australian Mark McVeigh, then 23, sued his pension fund for allegedly failing to adequately manage climate change risks in its investments. McVeigh’s suit was settled last year in his favour. At least 1,587 such climate-related lawsuits have been filed worldwide, which are increasingly corporate in nature – a trend that is likely to accelerate.
Singapore, an island that is well aware of climate change risks, has also witnessed the changing tides. In April, in conjunction with the Commonwealth Climate and Law Initiative, a team of Singapore lawyers led by Jeffrey Chan, SC, launched a legal opinion on directors’ responsibilities on climate change. Earlier this year, lawmakers filed Singapore’s first motion on climate change, proposing regular reviews on carbon tax, more public electric vehicle charging points, expanding climate education curriculum and adding climate defence as a seventh pillar of total defence. DBS Bank, Singapore’s largest, has also announced that it will cease financing customers who derive more than half of their revenue from thermal coal by 2039.
Taking such concrete steps to mitigate climate change obviate the kind of intergenerational injustice pointed out by the First Senate of the German Constitutional Court, which ruled that future generations’ fundamental rights were violated because a piece of legislation was not specific enough about how Germany was going to reduce greenhouse emissions by 2050.
It said: “One generation must not be allowed to consume large portions of the CO2 budget… if this would involve leaving subsequent generations with a drastic reduction burden and expose their lives to comprehensive losses of freedom.”
Inequality – an intergenerational injustice
Another kind of intergenerational injustice is this: millennials are the first generation in decades earning less, and having less wealth, than their parents had at the same age (although the gap is closing). The flip side is that any passed-down privilege may eventually widen wealth gaps and ossify social classes.
According to the 2021 Deloitte Global Millennial Survey, two-thirds of millennials and zoomers see wealth and income as unequally distributed in society. This opinion is more extreme in Latin America (84 per cent) and Central and Eastern Europe (80 per cent).
As Singapore approaches its 56th year, Ravi Menon, managing director of the Monetary Authority of Singapore, has spoken about the potential for wealth inequality to undermine meritocracy.
He said: “Because the accumulation of wealth can far exceed the differences in income from differences in abilities and performance, because of the way prices of financial assets and real estate (move), with little effort, one becomes extraordinarily rich… And so, wealth inequality creates a sense of unfairness.”
Menon also warned about the risk of hereditary meritocracy, which is when society’s elites pass on their privileges to their children.
According to Deloitte, while millennials and zoomers do contribute on a personal level, such as making donations and volunteering to improve literacy among younger people, they are aware that such actions hardly move the inequality needle. So, about a third of the respondents vote for politicians working to reduce income inequality.
It remains to be seen, though, whether the millennials will continue to be concerned about inequality when the greatest wealth transfer in modern history arrives: their US$30 trillion inheritance from baby boomers and Gen X. Unless millennials maintain the moral fibre to do the right thing – or governments intervene – wealth inequality will skyrocket.
Whistleblowing on wrongdoers
A key piece of good corporate governance is whistleblowing. According to law firm Freshfields’ Whistleblowing Survey 2020, millennials – especially the younger ones – are most likely to speak up: 52 per cent of those surveyed aged 25–34 years had outed wrongdoers, compared to 40 per cent (35–44 years), 28 per cent (45–54 years), and only 20 per cent (55 years and above) in other age brackets.
Small wonder then that it was a 38-year-old who exposed the Wirecard scandal, where €1.9 billion went missing from its accounts. Singaporean Pav Gill, who launched an investigation in 2018, found evidence of, among other things, fake customers, invoices and contracts. He presented these findings to Wirecard’s bosses, including then-COO Jan Marsalek (now a fugitive), but no action was taken. After Wirecard’s collapse, former employees reported that staff routinely removed six-figure sums of banknotes in plastic bags from the headquarters from as early as 2012. Yet the brazen fraud continued for years, with Wirecard’s game being up only in 2020.
Interestingly, according to Freshfields, millennials were willing to whistleblow even though almost a quarter of those surveyed felt that senior management would retaliate by cutting bonuses or hindering promotion prospects. Over a fifth thought that they could be terminated. That was certainly Gill’s experience. He was not just effectively fired, but bad references were allegedly given to his potential employers. It appears then that millennials are willing to speak out against wrongdoing even at great personal and professional costs. That is an encouraging sign for better corporate governance as the biggest cohort in the workforce (all two billion) move upwards on the corporate ladder.
Gen Z and beyond
The continued and growing concerns of millennials on what were once seen as fringe issues are a reminder to take future generations more seriously. Swedish environmental activist Greta Thunberg may be dismissed as a naive teenager. But she and 24-year-old Pakistani female education activist Malala Yousafzai, who is also the youngest Nobel laureate, are the top two role models for teenage girls. Activism is no longer a fringe activity among zoomers. As with millennials, zoomers may not outgrow their passion and ideals even after the reality of adulting hits.
Changing tastes and attitudes mean that digital natives are comfortable with creating and spending on digital assets and entertainment, spanning from AI art to TikTok videos. While we do not all have to buy NFTs of memes and tweets, we do have to listen a bit more carefully to the young. One way businesses can do so is to set up shadow boards consisting of millennials. Gucci did so in 2015, and was rewarded with sales growth of more than 100 per cent over four years. It avoided one of its competitors’ mistakes of being slow to realise the importance of digital channels and the disruption by influencers. Perhaps instead of just “listen to your elders” – as kids are often told – we will also do well to listen to our youths.
A version of this article ran under the headline “Take millennials and zoomers more seriously” in The Business Times on 3 August 2021.