US boards increase ethnically and racially diverse members
Although the growth of gender diversity in Fortune 500 boardrooms stalled last year (CorporateSecretary.com, 7/19), the percentage share of ethnically and racially diverse board directors increased slightly, according to Heidrick & Struggles’ Board Monitor research.
The share of new board roles filled by ethnically and racially diverse directors was 22.1 percent – its highest level since Heidrick & Struggles started tracking this data in 2009. But this still means that for every ethnically or racially diverse director, four white directors are appointed to Fortune 500 boardrooms. The ratio of male to female appointments is three to one, demonstrating that the top US boards are still largely white and male.
African-American directors account for 9.3 percent of last year’s board appointments, while both Hispanic and Asian/Asian-American directors each represent 6.4 percent of total new board appointments.
‘Historically the issue has been that two thirds of the appointees are current or former CEOs or current or former CFOs,’ says Jeffrey Sanders, vice chairman and co-managing partner of the global board and CEO practice at Heidrick & Struggles. ‘That population of people does not have nearly enough diversity in it. Within the CFO population, 5 percent of that group is ethnically diverse. Within the CEO population, 6.7 percent is ethnically diverse. Boards have to become more creative about how they think about sourcing talent.’
The top two sectors to appoint African-American board directors last year were industrial and consumer, with 33 percent and 28 percent, respectively, of total appointments. The consumer sector appointed most of the new Hispanic directors, with 59 percent of the overall hires, while Asian-Americans were most likely to find a board seat at a technology company, as the sector represented 41 percent of all appointments.
‘It’s not enough progress,’ Sanders adds. ‘There needs to be more.’
Sanders told Corporate Secretary sister publication IR Magazine in part one of this video series that boards are beginning to broaden the talent pools they look in, naming HR directors, general counsel and cyber-security experts as roles that could enable access to more diverse and board-qualified individuals.