“We can certainly see progress being made. However, it is gradual and slow.”

That’s what Carey Oven, national managing partner at the Center for Board Effectiveness and chief talent officer at Deloitte Risk & Financial Advisory, told me about corporate board diversity.

There are 200 companies in the Fortune 500 whose boards have 40% or more members who are, basically, not white males. This was an initial percentage goal set by the Alliance for Board Diversity (ABD) in 2004. However, that’s nearly four times the number of companies that cleared that bar a decade ago.

A multiyear study released today by the ABD, in collaboration with Deloitte, reviewed board diversity changes from 2016 to 2020 across the Fortune 500. Public filings were reviewed up until June 30, 2020, for a year-over-year comparison.

But the Fortune 100 is outpacing the 500.

At Fortune 100 companies, women and minorities account for 42.2% of board members, and minorities alone account for 20.6%, says Linda Akutagawa, chair for the ABD, and president and CEO of Leadership Education for Asian Pacifics. In comparison, women and minorities are represented in just over 30% of Fortune 500 boards, and minorities only represent about 18% of members, Akutagawa says. The study defines minorities as Black, Hispanic, and Asian/Pacific Islander individuals.

“There has been a strategic inflection point that we’ve all gone through as a society that is helping us take a deeper look at diverse representations across corporate America and certainly within the boardroom,” says Oven.

There may not be one sole reason that Fortune 100 companies are faring better than the 500 in board diversity, Akutagawa says. But it could be possible that Fortune 100 companies are “seeing that their financial performance, their marketplace performance is going to be better because they have more diverse boards,” she says. 

Investor entities like BlackRock are paying attention to the data that diversity on boards creates increased ROI, Akutagawa says. Research has shown a correlation between diversity on boards and financial performance, she says. 

At Fortune 500 companies, white women made the largest strides among women, gaining 209 board seats in 2020 for an increase of 20.6% from 2018, according to the report. In comparison, Black women gained 29 seats in 2020, an increase of 18.8% from 2018; Hispanic women gained 14 seats, an increase of 31.1%; and Asian/Pacific Islander women gained 28 seats, an increase of 45.9%. The rate of representation for minority men showed no substantive increase in either the Fortune 100 or 500, according to the study.

One sobering fact, despite some progress, is that at the current rate, to reach “40% diversity of minorities on boards, it’s going to take until 2074,” Akutagawa says.

“One of the things that our report did show is that nearly 36% of the diverse board seats are occupied by people that are actually on multiple boards,” Oven says. “So, there’s a recycle rate. Looking for qualified, diverse board members in wider array of places is what will help accelerate the progress there.”

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

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