Corporate Boards 106: Diversity Within Diversity: A Look At Who Is Gaining Corporate Board Positions
So far, I have discussed what corporate boards are, the makeup of corporate boards, the work they do, and how much of an impact they have on our economy, and why it is important to have gender diversity on a corporate board. But what about examining diversity beyond the gender diversity lens? Organizations measure diversity by employing people in various demographics, including race and ethnicity, disability status, LGBTQ status, among other traits. Such demographics are essential to forward-thinking corporate boards in gaining more diversity of background, experience, and thought in the boardroom. For purposes of this article, I will examine the race and ethnicity piece to see the general progress of board seat population rates by white women and women of color.
The Alliance for Board Diversity (ABD) has been striving to increase the representation of women and minorities on corporate boards since 2004. Deloitte collaborated with ABD to examine the representation of women and minorities on public company boards of directors across America’s largest companies. This study is a culmination of a multi-year effort to look at the trends relative to the overall diversity and the comparative differences in rates of representation among women and minorities over a decade.
This analysis reviewed data from 2016 to 2018 across the Fortune 500*. Although companies change in the Fortune 500 over time, overall, this study found that the most significant difference is that since 2012, the number of companies with greater than 40 percent diversity of their corporate boards has doubled. Also, women and minorities have made more progress in board representation for the Fortune 500 between 2016 and 2018 than between 2012 and 2016. The percentage of Fortune 500 board seats held by women and minorities rose 1.7 percent since 2016, with women and minorities holding 34 percent of board seats in 2018.
While these statistics show the overarching trends of gender and race/ethnicity diversity on corporate boards, I wanted to examine solely the race/ethnicity piece of the equation. Specifically, what race/ethnic group has seen the most significant gains of board seats.
This graphic shows that in 2018, 16.2 percent of board seats in the Fortune 500 were held by African American/Blacks, Asian/Pacific Islanders, Hispanic/Latinos, and Others. This is up 1.7 percentage points from 2016. Although this is a small increase, the percentage points of the number of board seats held by the same minority groups only rose to 1.1 percent from 2012 to 2016.
The data in this study analyzed the number of Fortune 500 board seats gained or lost from each group. The number of total board seats in the Fortune 500 increased from 5,440 in 2016 to 5,670 in 2018, and a few groups experienced significant gains in these seats. For example, African American women and Asian/Pacific Islander women had the most significant percentage increase in board seats gained in the Fortune 500—larger than any other gender or race/ ethnic group. African American women filled an additional 32 seats in 2018 (26.2 percent), while Asian/Pacific Islander women occupied 17 additional seats in 2018, with an impressive 38.6 percent increase from 2016.
The most notable change, though, is in only six years (2012 to 2018), the number of companies with greater than 40 percent diversity in race and ethnicity has doubled, and it has nearly tripled since 2010.
Want to find out more about how far women and minorities have come in their representation on corporate boards? Come and join the conversation on November 21, when we hold the 8th Annual National Conversation on Board Diversity. 2020 Women on Boards is a national nonprofit dedicated to raising the percentage of women who serve on corporate boards in the U.S. to 20% or greater by 2020.
*Graphics and statistics used for this article are credited to "Missing Pieces Report: The 2018 Board Diversity Census of Women and Minorities on Fortune 500 Boards". Harvard Law School Forum on Corporate Governance.
Christine Krause is a marketing team member for the 2020 Women on Boards 8th Annual Conversation on Board Diversity – Chicago. This series, Corporate Boards 101+, will highlight her experience and learnings as a newcomer to the important work of board diversity.
