African American board representation grew in 2022
A little more than three quarters (76 percent) of publicly traded companies in the Fortune 1000 had at least one African American director serving on their board as at September 2022, compared with 61 percent in 2020, according to a new report by the KPMG Board Leadership Center and the African American Directors Forum.
All (100 percent) of the largest companies – those on the Fortune 100 – had at least one African American director serving on their board for the first time in 2022. But only 22 percent of Fortune 1000 companies had more than one African American serving on their board.
This information is based on a joint study by the two organizations into the representation of African American directors serving on the boards of publicly traded Fortune 1000 companies. Demand from shareholders and investors for this type of information will only continue to grow, says Stephen Brown, senior adviser and managing director at KPMG Board Leadership Center.
‘They want disclosure of your company’s process and the story behind the data,’ he says. ‘Corporate secretaries need to be able to tell the story behind the numbers. If you don’t own and tell your story about the numbers on your board, someone else will.’
Among Fortune 1000 companies, 94 percent in the food, beverages and tobacco industry had at least one African American director on their board, compared with only 59 percent of those in the engineering and construction industry. Nearly a third (32 percent) of technology companies on the Fortune 1000 list had no African American directors.
African American board members are more demographically diverse
The number of African American directors in Fortune 1000 companies rose dramatically starting in 2020 after the murder of George Floyd, according to the report.
‘After George Floyd there was a worldwide focus on board composition and diversity and a spike in African American representation because of that intense focus,’ Brown says. ‘And the board members that firms added had outstanding credentials.’
This additional scrutiny also contributed to greater gender and age diversity in the boardroom across African American board members. In 2022, 28 percent of directors overall serving on Fortune 1000 companies were women; among African American directors, 40 percent were women. Likewise, only 36 percent of all Fortune 1000 directors were under age 60, while 47 percent of African American directors were under 60.
Much of this increase can be attributed to the board selection process, according to Brown. ‘Boards are expanding their search footprint to think about the skills matrix,’ he explains. ‘You have to expand your search beyond your Rolodex.’
In other words, boards have to seek out candidates with skills beyond CEO and CFO experience, says Brown. Expertise in technology, cyber-security, human capital management and climate risk are becoming increasingly more valuable to boards.
Population parity yet to be reached
Despite this progress, the pace of adding African American director seats has slowed since the increase in 2020 and has yet to reach parity with the representation of African Americans in the overall US population.
According to the study, 40 percent of African American directors joined their board after June 1, 2020, 28 percent joined their board between September 2020 and September 2021 and only 9 percent joined their board between September 2021 and September 2022.
African American directors held only 10 percent of board seats in Fortune 1000 companies as at September 2022, compared with African Americans representing 14 percent of the US population.