Corporate boards are no longer lily-white. In 2021, board diversity among the largest corporations in the nation increased after a spike in Black board directors appointments.
Pushed to create more inclusive boards following the nationwide George Floyd protests of 2020, companies did a broader outreach to attract non-white candidates. Up until now, they have traditionally been overwhelmingly white and male. Recruiters blamed a “pipeline” problem, saying there weren’t enough non-white people qualified to be directors.
Last year, they were able to find qualified candidates in a targeted effort.
In 2021, Black directors were named to fill 535 board seats, The New York Times reported. This increased their total to 1,919, marking a nearly 40 percent increase, according to the ISS Corporate Solutions analysis of the Russell 3000 list of the 3,000 largest American corporations. Black directors currently account for 7.4 percent of directorships.
“It’s fair to say companies are being more creative in finding candidates today,” said Dr. Freeman A. Hrabowski III, president of the University of Maryland, Baltimore County, and a longtime member of the boards of T. Rowe Price, the investment firm, and McCormick, the spice and seasoning company.
“The biggest problem is that people have not spent enough energy focusing on finding people who could be great candidates for boards,” said Hrabowski, who is Black, told The New York Times.
Directors from underrepresented groups now hold 17 percent of board seats, an increase from 14 percent in 2020, the ISS Corporate Solutions data shows. Women of all races have also made advances, now accounting for 27 percent of all directors. This was a slight boost from 24 percent the year prior.
Among the corporate boards of 50 percent non-white members, Starbucks and Accenture have the most racially diverse boards in the S&P 500, CNBC reported.
Why is it important to have diverse boards? Boards are powerful bodies as they can sway companies’ major decisions as well as select top executives, boards.
White board directors decreased slightly in 2021, but they still account for eight of every 10 board members, and six of 10 are white men.