A Watershed Moment for Minority Directors

This article is 246 words or a 1 minute read

For the first time, racial and ethnic minorities now hold 20% of all board seats at the nation’s largest public companies.

According to ISS Corporate Solutions (ICS), an analytics firm focused on corporate governance, Black people have experienced the largest gains and now hold 8.3% of all board seats, up from 4.4% four years ago (90% increase). Asian directors occupied 7.2% of board seats (55% increase) and Hispanic directors held 3.6% (37% increase).

Said Marija Kramer, head of ICS, “These figures represent a watershed moment for minority corporate directors.” The study reviewed boards of the largest 3,000 U.S. businesses for 2019-2022.

Investors have been pushing portfolio companies to diversify their boards. Large institutional investors like BlackRock, Inc. and Fidelity Investments take boardroom diversity into account when making investments because they have concluded that diverse leadership is more effective.

“The good news is that investors care, and they are making their voices heard.…” said Shellye Archambeau, a member of Verizon Communications board of directors and recent guest on The Gary Bisbee Show.

Black directors also saw notable gains in positions of influence over the direction and composition of boards. The proportion of Black lead directors more than doubled, to 4.7% while the proportion of Black nominating committee members grew from 5.4% to 9.9%.

The proportional numbers for diverse directors remain behind those of the U.S. population as a whole, but largely due to institutional investors, the rate of increase is high and gaining momentum.

Onward and upward!

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