Is it time for mandatory retirement ages to go?

July 13, 2012

Once upon a time, 65 was considered old. That’s when Social Security kicked in and people were supposed to stop working. Then again, life expectancies were somewhere around 72. Now, articles like this one routinely tout 65 as being the new 45.

While many workplaces have embraced this new dynamic — see this Knowledge @ Wharton article, for example, on the Silver Tsunami — many public companies still cling to a mandatory retirement age for their directors. A quick search of recent filings shows that companies as diverse as Saks (SKS), Medtronic (MDT) and Knight Capital (KCG) have all seen directors leave recently due to mandatory retirement ages.

We were prompted to look at this issue a bit more closely after spotting this 8-K that Molson Coors filed earlier this week. In the filing, the company noted that it fell out of compliance with NYSE listing requirements because two of its three directors who sat on the audit committee — John Cleghorn and David O’Brien were forced to retire at the annual meeting on May 30 because they had reached the mandatory retirement age. On May 31, the company named two new directors to the board, but apparently forgot to appoint either of them to the audit committee.

Now, Molson Coors is a controlled company, so the rules are slightly differently there. Still, the idea of a forced retirement age at a time when all sort of people continue to lead productive lives well into their 80s (and older), seems a bit parochial in this day and age. That’s especially true when it leads to something like the notice that Molson Coors received from NYSE.

Over the years, we’ve seen several companies waive their mandatory retirement ages when it seems to suit them. Granted, this could lead to more entrenched directors who are puppets of management. Still, perhaps there needs to be more of a common sense approach to mandatory retirement ages going forward. Given what it sells, it would be particularly ironic if Molson Coors were to lead that charge.

Image source: Beer mug via Shutterstock

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