Only 1 In 5 New Board Appointees At Fortune 500 Companies Are Not White
After slipping for two years, the share of board of director appointees from underrepresented groups at Fortune 500 companies has surpassed its old record.
Twenty-two percent of new board director appointees last year were African-American, Hispanic or Latino or Asian American, according to a new study from executive search firm Heidrick & Struggles‘ new Board Monitor report, up from 21.4% in 2013.
While the share of African-American appointees was virtually unchanged from 2015 at 9.3%, Hispanic or Latino and Asian American appointees saw significant gains. Each group grew to 6.4%, up from 4.0% and 4.8% respectively.
The new data also shows a reversal of a downward trend that began in 2014, when the share of board appointees from underrepresented groups fell to 18.6%, and 2015, when it fell again to 18.1%.
While the report shows some progress for underrepresented groups, regardless of gender, it also represents a step back for women on Fortune 500 boards. Women accounted for 27.8% of board appointments in 2016, losing two percentage points from 2015. Because of this, Board Monitor had to add six years to its estimate of when Fortune 500 companies will achieve gender parity among their board of director appointees.
Of the 39 African-American board appointees in 2016, one-third were at industrial Fortune 500 companies. Companies in the consumer industry accounted for 12% of Hispanic or Latino/a appointees. And Asian-Americans saw the most appointments, 28%, at technology companies.
The conversation about diversity in the overall tech workforce, especially technical workers, tends to focus on advocating for African-American and Hispanic or Latino workers and treats Asian Americans like part of the majority. It’s not entirely unwarranted. While Asian Americans account for 5.5 of the overall U.S. population, they account for up to 39% of technicians and 32% of the overall workforce at Twitter.
This overrepresentation has compelled some Asian engineers and technicians to publish calls to action, urging other Asians in the industry to use their position to advocate for other minority groups. However, this new data shows that Asian Americans still have difficulty making it into vacant board of director seats.
One of the common misconceptions about overt efforts to increase board diversity is the belief that it will lower the bar, ushering in appointees without experience for the sake of optics.
The numbers in the new report provide some evidence that this hasn’t been the case.
While the share of African-American, Hispanic or Latino and Asian board directors rose from 18% to 22% from 2015 to 2016, the share of appointees with prior experience went from 64% to 75% over the same time period.
Most of the first-timers were at consumer companies, 35%; industrial, 25%; and financial services, 15%.