The murder of George Floyd galvanized the need for racial reform and equity in the U.S., and boards have been listening. Data from the consulting firm ISS Corporate Solutions reveals that between July 2020 and May 2021, 32% of individuals newly appointed to the corporate boards within the country’s largest S&P 500 companies were Black — up from 11% the previous year.
But still, even with those gains, there is a massive gap to overcome, according to a new study conducted by the Alliance of Board Diversity and the consulting firm Deloitte.
Alexandra Olson and Stan Choe of the Associated Press have reported on the “Missing Pieces Report: A Board Diversity Census of Women and Minorities on Fortune 500 Boards,” which shows that “an overwhelming 82.5% of directors among Fortune 500 company boards are [still] white.”
“Many U.S. companies have rushed to appoint Black members to their boards of directors since racial justice protests swept the country last year,” Olson and Choe reported. However, “in the two preceding years, progress on increasing racial diversity on boards stagnated. Black men even lost ground.”
According to the report, “the number of women serving on Fortune 500 boards rose four percentage points to 26.5% between 2018 and June of 2020 — a faster pace of progress than the 2% increase over the preceding two years.”
“In contrast, the number of racial minorities on Fortune 500 boards rose by just above a percentage point,” Olson and Choe reported. “That was a slower pace than the 2% increase during the previous two years. In a telling finding, the number of Black men on Fortune 500 boards fell by 1.5% between 2018 and June 2020, even as the representation of Black women rose by 18%.”
Even with those seemingly significant gains, 6% of minority women and just under 12% of minority men ultimately hold spots on Fortune 500 boards — a sign that progress isn’t happening fast enough, according to Linda Akutagawa, chair for the Alliance for Board Diversity.
She told Olsen and Choe that in 2018, Asian, Hispanic and Black women directors made gains in boardroom representation — but compared to the gains for white women, those numbers are minuscule.
“White women held three new seats for every [one] new seat occupied by a woman from a racial minority,” Olson and Choe reported.
One positive takeaway from the new research? Experts believe the gains from the past year have benefitted talent pipelines, which are flourishing with plenty of qualified people ready for promotions and new positions. Carey Oven, the national managing partner of Deloitte’s Center for Board Effectiveness, told AP that these companies just need to commit to making the change and then sticking with it.
Ultimately, Oven said, “it’s really a choice for boards to take steps to become more diverse.”