Slow Gains for Women and Minorities on Boards of Big U.S. Firms, Study Says


The percentage of minorities and women on the boards of the largest public companies in the United States has edged up in the past two years, but “advancement is still slow” and the bulk of corporate directors at such firms continue to be white men,

a study released on Tuesday finds. The study, by the Alliance for Board Diversity 1, which advocates for broader demographic inclusion in boardrooms, and the professional services firm Deloitte, shows that women and minorities occupied 38.6 percent of board seats at Fortune 100 companies last year, compared with 35.9 percent in 2016.

At Fortune 500 companies, the figure rose to 34 percent in 2018 from 30.8 percent two years earlier, the last time the study was done, but still fell short of the alliance’s target.

“Our goal is to get to 40 percent diversity so we can have fair representation on Fortune 500 corporate boards,” said Linda Akutagawa, the group’s chairwoman. She added that “some of the largest companies in the world can find talented, diverse board members with the skills and experience to put on large corporate boards.”

Ms. Akutagawa said the alliance expected that, at the current pace of change, large companies would hit the 40 percent target by 2024, especially if they widened the pool of potential directors.

The alliance’s study found that African-American women and women from Asian and Pacific Island backgrounds made particularly substantial inroads on Fortune 500 boards during the period in question. African-American women held 26.2 percent more directors’ seats in 2018 than they had in 2016, while women of Asian and Pacific Island heritage held 38.6 percent more.

At Fortune 100 companies, there were 44.8 percent more African-American women serving as directors last year compared with two years earlier. Among those entering the boardroom ranks was Lisa Wardell, the chief executive of Adtalem Global Education. Ms. Wardell last year joined the board at the home-improvement retailer Lowe’s, one of the country’s 50 top-grossing companies.

The progress was modest, but notable, for African-American men at Fortune 100 companies. Their presence on these boards grew about 1 percentage point since 2016, nearly matching the gains made over the previous 12 years. Over all, African-American men held 7.7 percent of Fortune 100 board seats last year, and 5.9 percent of Fortune 500 board seats.

The alliance’s study analyzed 1,033 new board appointments at Fortune 500 companies last year. More than 80 percent of the appointees were white, and about 60 percent of that group were men. At Fortune 100 companies, 77 percent of new board appointees were white, and about 51 percent of that group were men.

The study found that 19.5 percent of Fortune 100 board members last year were minorities. Just over 11 percent were African-American, 4.4 percent were Hispanic and 3.8 percent were Asian or with Pacific Island backgrounds.

Broad measures of board diversity, the study noted, could be affected by the double-counting of those who serve as directors at more than one company. For example, Grace D. Lieblein, a former General Motors vice president for global quality, is a director at the wireless communication company American Tower, Honeywell International and Southwest Airlines, according to publicly disclosed information.

he presence of some directors on multiple boards suggests “that while diversity of boards may be increasing, there is not necessarily an equivalent rate of increase in the number of new women and minorities on the boards,” the study said.

Companies have traditionally picked former chief executives as directors, meaning boards “more frequently will pull from a pool of existing minority board members instead of bringing new directors in,” according to the study.

Boards need to be “flexible in their criteria,” Ms. Lieblein said in an interview with the study’s authors. “Some diverse candidates may not be sitting or ex-C.E.O.s, but may still have outstanding backgrounds for the board.”

Correction: January 15, 2019 – An earlier version of this article misstated the gains made by women of Asian and Pacific Island heritage in the two years since the last survey. They held 38.6 percent more board seats, not 30.8 percent more. The article also misstated the percentage of African-American men on the boards of Fortune 100 and Fortune 500 companies. They have 7.7 percent, not 13.7 percent, of Fortune 100 board seats, and 5.9 percent, not 22.5 percent, of Fortune 500 board seats.

Ori Art

pdfarrrow  1 The study by the Alliance Of Board Diversity



...we find that banks with more gender diversity on their board perform better once the composition of these boards reaches a critical level of gender diversity, corresponding to a board female share of around 13-17 percent.

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