Audit firm Deloitte and the Alliance for Board Diversity have just released the Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 Boards a study examining the representation of women and racial/ethnic minorities (including Black, Asian/Pacific Islander and Hispanic persons) on public company boards among the Fortune 100 and Fortune 500 companies. The analysis of the Fortune 100 began in 2004 and the Fortune 500 in 2010, based on public filings reviewed through the end of June 2020.  The Report finds that the rate of change has been quite slow, espcially for some demographic groups. It remains to be seen whether the social unrest roiling the U.S. body politic—which has brought systemic racial inequity and injustice, exacerbated by the pandemic, into sharp focus—together with actions to mandate or encourage board diversity, such as California's AB 979 or, if approved, the Nasdaq board diversity proposal, will accelerate the rate of change evidenced in the Report.


California has adopted two board diversity statutes.  The first, SB 826 requires that publicly held companies (defined as corporations listed on major U.S. stock exchanges) with principal executive offices located in California, no matter where they are incorporated, include minimum numbers of women on their boards of directors. Under the law, each of these publicly held companies was required to have a minimum of one woman on its board of directors by the close of 2019. That minimum increases to two by December 31, 2021, if the corporation has five directors, and to three women directors if the corporation has six or more directors (see this PubCo post).

AB 979 requires, no later than the close of 2021, that a "publicly held corporation" (defined as above), have a minimum of one director from an underrepresented community.  A director from an "underrepresented community" means a director who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, gay, lesbian, bisexual or transgender.  No later than the close of 2022, a corporation with more than four but fewer than nine directors will be required to have a minimum of two directors from underrepresented communities, and a corporation with nine or more directors will need to have a minimum of three directors from underrepresented communities (see this PubCo post). 

Late last year, Nasdaq filed with the SEC a proposal for new listing rules regarding board diversity and disclosure. The new listing rules would adopt a "comply or explain" mandate for board diversity for most listed companies. The Nasdaq proposal set a "recommended objective" for Nasdaq-listed companies to have at least two diverse directors on their boards; if they did not meet that objective, they would need to explain their rationale for not doing so. The rule would also require listed companies to provide annually, in a board diversity matrix format, statistical information regarding the company's board of directors related to the directors' self-identified gender, race and self-identification as LGBTQ+. (See this PubCo post.) In March, in response to public comments, Nasdaq amended its proposal to, among other things, provide that companies with five or fewer directors may satisfy the recommended objective with one director from a diverse background rather than two and to provide a one-year grace period in the event a vacancy on the board brings a company under the recommended diversity objective. The SEC has just extended the time for consideration of the proposal, designating August 8, 2021, as the date by which it will either approve or disapprove the proposed rule change. (See this PubCo post.)

The Report observes that, among the Fortune 500, more progress in diverse board representation was made between 2016 and 2020 than between 2010 and 2016.  Nevertheless, the Report concludes that, while "there have been a few gains in board representation for some demographic groups, advancement is still very incremental, with goals of achieving proportional representation to the presence of women and minorities in the US population sometimes multiple decades away at current rates of change." According to one commentator cited in the Report, the slow progress demonstrated will improve only "when companies set intentional targets for gender and underrepresented groups on boards. A diverse and inclusive board comes from breaking the habit of relying on the usual candidates, and tapping into various networks to identify board-ready candidates. Without this effort, companies risk falling behind in having a board positioned to address complex challenges."

Below are some of the findings from the Report:

  • There were 200 companies on the Fortune 500 with boards reflecting more than 40% diversity, almost four times the number of companies a decade ago. More than 347 boards in the Fortune  500 have greater than 30% diversity. According to the Report, prior to 2018, "the increase in board diversity was spread across the 30% and above range. Since 2018, as many boards are moving up into the 30% to 40% range as are moving into the greater than 40% range."
  • The boards of six companies had no gender, racial or ethnic diversity, compared to 15 companies in 2016, with boards composed entirely of White males.
  • Here are some specific demographic data: among the Fortune 100, 6.6% of directors were minority women, 14.0% were minority men, 21.6% were White women and 57.8 % were White men. By race/ethnicity in the Fortune 100, 4.4% were Asian/Pacific Islander, 4.7%  were Hispanic, 11.4% were  Black, 79.4% were White and 0.2% other. Among the Fortune 500, 5.7% of directors were minority women, 11.8% were minority men, 20.9 % were White women and 61.7 % were White men. By race/ethnicity in the Fortune 500, 4.6% were Asian/Pacific Islander, 4.1% were Hispanic, 8.7% were Black, 82.5 % were White and 0.1% other.
  • Women and racial/ethnic minorities represented 42.2% of directors on boards of Fortune 100 companies, but only 38% of directors on boards of Fortune 500 companies.  In addition, slightly more than 20% of board seats in the Fortune  100 were held by racial/ethnic minorities, while the percentage was only 18% among the Fortune  500. The rate of increase for racial/ethnic minorities in the 2018-to-2020 period was slightly below 0.5%, a rate that would not achieve a level of 40% representation of minorities until 2055.
  • Progress made on overall diversity has been due primarily to the increase in the number of White women on boards, a group that had the biggest increases: a gain of 34 seats (15%) in the Fortune  100 and 209 seats (21%) in the Fortune  500. (That conclusion is largely consistent with the conclusion from another study regarding board diversity in California. See this PubCo post.) Almost 90% of the gains for women on Fortune 100 boards between 2018 and 2020 were gains by White women. Among the Fortune 500, according to the Report, "for every board seat newly occupied by a minority woman, White women occupied nearly three new seats. While the laudable goal of gender diversity has made substantial progress, it appears to be coming at the expense of a broader set of minority boardroom candidates." There was little increase in the number of directors who were minority men among either the Fortune 100 or Fortune 500—below 0.5% annually in the Fortune 500 since 2010. According to the Report, Black men lost one seat in the Fortune  100 and five seats in the Fortune  500.
  • Since 2004, gains for women and racial/ethnic minorities have averaged under 2% per year, with representation on boards of the Fortune 100 essentially unchanged for minority men and only slightly improved (0.5%) for minority women.  The Report estimates that, at that rate, representation of minority women on Fortune 100 boards at a level of 20%—the proportion of minority women in the U.S. adult population—would not be achieved until 2046.
  • In 2020, over a third of diverse directors (36%) held multiple board seats at Fortune 500 companies, suggesting that "the opportunities need to be spread more widely among eligible women and minority board candidates. In fact, we are underestimating the 'overreliance' on these board members, as we are not accounting for their board seats outside the Fortune  500." For Black directors, just over two out of every five board seats (43%) were held by a director serving on multiple Fortune 500 boards. That percentage was only 23% for directors who are Asian/Pacific Islanders. The Report refers to the rate at which individuals serve on more than one board as the "recycle rate."  Women and minorities have consistently held higher recycle rates than White males in the Fortune  500. According to the Report, the higher recycle rate for women and minorities may "point to a need to look at a broader set of industry experiences, C-suite roles, backgrounds, skills, and experiences for potential board candidates." To achieve board diversity, companies will need to overcome the inclination to tap the same people for board seats; according to one commentator, compnaies "must be intentional about reaching outside of their traditional networks and tapping the plethora of qualified, Black board-ready executives who are ready to serve."


For the "Black Corporate Directors Time Capsule Project," Barry Lawson Williams, a retired director, interviewed 50 seasoned Black directors. Illustrating the point of the high recycle rate for Black directors above, Williams himself has served on 14 corporate boards; the 50 directors he interviewed served on an aggregate of 274 corporate boards in their careers, and over 60% of the directors had served on five or more boards. (See this PubCo post.)

  • Of the 974 board seats filled by new directors among the Fortune 500 since 2018, 81% were filled by White directors, including 53.8% filled by White men. With regard to new directors on Fortune 100 boards, 79.9% were filled by White directors, including 52.1% filled by White men, a slight increase from 2018.
  • According to the Report, appointing women and racial/ethnic minority directors may provide benefits beyond just demographic diversity. Currently, directors who are women and racial/ethnic minorities are "more likely than White men to bring experience with corporate sustainability and socially responsible investing, government, sales and marketing, and technology in the workplace to their boards. These skills are on the forefront of growth in a post pandemic economy and less than 55% of board members in the Fortune 500 report having any one of these skills." One question raised in the Report, however, is whether women and minorities might be pigeonholed.
  • White women experienced more progress in appointments to board leadership positions than other demographic groups. No surprise, the position of board chair "remains dominated by White males. There has been about a 5% increase from 2012 to 2020 in the number of chairs held by women and minorities."  Since 2012, White women have become more likely to be audit committee chairs; however, the "likelihood for minorities has remained stagnant, if not slightly decreased, since 2016. The increased likelihood of White women being compensation committee chairs has doubled since 2012 to 13.2%, while the likelihood for minorities has only increased by just over 2%.   Progress for women and minorities has been more equitably distributed for lead director and nomination or governance committee chairs." When women and racial/ethnic minorities occupy positions as board chair or nom/gov committee chair, the data showed that, after two years, these boards were "more likely to have higher percentages of women or minorities." 
  • The Report identified 29 companies in the Fortune 500 that demonstrated at least 60% board diversity, the highest percentage of women and racial/ethnic minority representation. However, the Report found no companies that reflected the demographics of the U.S., with the benchmarks of 50% women, 13% Black, 18% Hispanic and 6% Asian/Pacific Islander.


Here's some related news from the Fortune 500: according to Fortune, in 2021, there were 41 women (8.1%) who were CEOs of businesses on the Fortune  500—up from 37 last year and an all-time record.  By comparison, in 2000, there only two women on that list. Among the 41, for the first time, there were two Black women—only the second and third Black women to run Fortune  500 businesses—and one woman running the fourth-ranked business, the highest-ranking business ever run by a woman CEO. The article suggests that, "[t]aken together, these three jobs seem to reflect a change in who America's largest businesses are choosing to put in charge." The list of 41 also included the first women to run a major Wall Street bank.  All four of these women succeeded males CEOs. According to one commentator, "[w]e're seeing more intentionality. We're seeing a focus on women of color. And we're seeing a recognition that diversity and women in leadership is even more important."

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