Board Diversity Still Eluding Large Companies

A new Equilar report finds anemic growth of diverse representation on U.S. corporate boards as the gap between board makeup and representation within the overall population continues. Board diversity proponents point to a persistent misperception that the availability of diverse board members is limited as a major cause.  

Supply is not the issue: Esther Aguilera, President and CEO of Latino Corporate Directors Association, said “Supply is not an issue. There's ample Latino board talent with extensive business experience from all industries."  Michael C. Hyter, President and CEO at The Executive Leadership Council, said, “There remains a stubborn misperception that the availability of qualified Black board candidates is limited, and that it takes a lot of effort to identify qualified Black board candidates. Both of these points are false and continue to hinder and slow progress.”

Large companies fared better than their smaller counterparts. “At the end of 2021,” the report states, “44.6% of board seats in the Equilar 500 were composed of diverse directors compared to 36.1% of Russell 3000 board seats. Additionally, 21.9% of the Equilar 500 board seats were held by ethnically diverse directors as opposed to 15.1% of the board seats across the Russell 3000.”

Missed opportunity: According to a report by Heidrick & Struggles, the share of first-time board members in 2021 was the highest since 2015. However, 55% of new directors were men, and 59% were white.

The good news: Progress is being made, if slowly. In 2021, the highest share of women ever were appointed as directors, at 45%, and a combined 48% are diverse.