Age limits for board members: good practice or discrimination?

Last month, BBVA announced that it had removed the age limit of 75 years for serving as a board member from its Board Regulations. Previously, other Spanish companies listed on the stock exchange that had these limits—whether mandatory or recommended—had been gradually removing them, such as Inditex (in June 2023) and Redeia (in December 2024).

The Code of Good Governance of the Olivencia Commission (1998) addressed this issue in the following terms: “The Commission's view on this point is that certain measures should be adopted to facilitate the replacement of older directors, while allowing the company some margin to benefit from the experience of certain directors. In this sense, it seems advisable to establish a prudent retirement age, which could likely be between sixty-five and seventy years for executive directors and the chairman, and more flexible for others (a percentage limit on the number of directors who can continue to serve beyond the reference ages could be considered).”

The subsequent CNMV Codes, including the current one from 2015 revised in 2020 (whose update is currently underway and is expected to be approved in early 2027), not only did not include any recommendation on this issue but did not even mention it.

The Technical Guide 1/2019 on Nominations and Remuneration Committees, approved by the CNMV in February 2019, does refer to the age of directors, although it links it directly with the progressive renewal of board members: “That in re-election proposals, the CNR considers the need for progressive renewal of the Board. To this end, factors such as the diversity objectives set by the entity should be taken into account, including, among other aspects, how long each director has held office and the possibility of establishing a shorter term than legally required, as well as factors related to their age, both individually and in relation to the average age of the board as a whole.”

What is the reality of boards of directors? According to data from the CNMV Corporate Governance Report on listed companies for the 2024 fiscal year, the average age of directors in 2024 was 61.2 years (62 years for IBEX 35 companies). By age group, 5% of directors were under 45 years old, and 17.8% were 70 years or older, with the largest age group being directors aged between 55 and 65 years, representing 40.1% of all directors of Spanish listed companies in 2024.

Although specific circumstances in the past may have justified companies establishing these limits, this measure today does not seem useful in itself, and it could even be questioned whether it might be discriminatory.

Good corporate governance

The composition of boards of directors (and their renewal) is an essential element of good corporate governance. While it is important to incorporate new members who can offer a contemporary perspective in an environment marked by technological transformation, increasing competition, and geopolitical instability, it is also essential to have professionals with extensive experience, deep knowledge of the companies and their sector, and personal prestige—qualities that are essentially acquired through long professional careers.

A director must be suitable for the position, and this implies possessing certain qualities in terms of education, knowledge, and experience, along with skills like adaptability, engagement in continuous learning, and dedication—qualities that imply having time and enjoying good health. None of this is inherently tied to a specific age. Arguing otherwise would mean unjustifiably excluding valuable individuals for reasons unrelated to their talent or ability.

Fortunately, in recent years, society seems to have become more aware of ageism or age discrimination. This is due, at least in part, to the growing concern over the aging of the global population, driven by declining birth rates and the overall increase in life expectancy.

In conclusion, if we are convinced that diversity on the board enriches the debate by widening the scope of alternatives and perspectives considered, and thus improves the effectiveness of its functioning and the quality of its decisions, it does not seem possible to argue that an age limit for directors is an appropriate measure to contribute to the optimal composition of boards of directors.

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