A new report from the Alliance for Board Diversity (ABD) and Deloitte, reveals that women and people of color represent 34% of all corporate board seats in Fortune 500 companies—placing board diversity at an all-time high.
Here are some key findings from the study:
-Black woman gained 32 board seats in 2018, an increase of 26.2% from 2016.
-Black men gained 26 board seats in 2018, an increase of 8.5% from 2016.
-Black and Asian women achieved the largest increase in board seats; black women at a 44.8% increase, and Asian women at a 30.8% increase.
-Companies are increasingly re-appointing minority board members to their boards rather than seeking out new directors.
“The increase in boardroom diversity over the last two years is encouraging, but we must not overlook that Caucasian/White men still hold 66% of all Fortune 500 board seats and 91.1% of chairmanships on these boards,” said Linda Akutagawa, chair for the Alliance for Board Diversity and president and CEO, LEAP (Leadership for Asian Pacifics).
“While progress has been achieved, there is still much more work to do,” said Deb DeHaas, vice chairman and national managing partner, Deloitte Center for Board Effectiveness.
‘Wokeness’ in the Boardroom
Corporate America has been responsive to the wave of activism, particularly across social media, in regards to racism, sexism, economic inequality, and various other societal ills. Last year, Nike interjected itself into the heated debate over NFL players kneeling during the national anthem pre-game, to protest police brutality. The athletic apparel company made the symbol of the kneeling movement, Colin Kaepernick, a star in one of its ad campaigns.
The risk of offending customers who disagree with protesting on the field seemed to be worth taking. Nike’s sales increased 31% after the Kaepernick ad backlash.
Recently, Gillette, a Procter & Gamble brand, released an ad in line with the #MeToo movement, urging men to take responsibility for sexist behavior of other men. The ad is inciting both praise and outrage.
It’s not yet known how the controversial ad will affect P&G’s bottom line; the company is set to release its Q2 earnings next week (but so far, Wall Street speculation is favorable).
Burger King is the latest company to wade into political waters after posting a tweet poking fun at a misspelled tweet of Donald Trump’s.
CNN coined this ad trend “woke advertising.” This “wokeness” has presumably made it into the corporate boardrooms as the growing diversity board diversity numbers seem to evidence.
Despite Spate of Black Executive Board Appointments, Challenges Persist
A number of high-profile black executives have been appointed to the boards of some of the world’s largest companies. Last November, Nike announced the appointment of John W. Rogers, the CEO and founder of Ariel Investments L.L.C. to its board. Retired AMEX CEO Ken Chenault sits on the boards of Facebook and Airbnb. Edith Cooper, the executive vice president and global head of human capital at Goldman Sachs was added to Silicon Valley company Slack’s board. View a full listing of black board members on BLACK ENTERPRISE’s 2018 Registry of Corporate Directors.
As progress is made, challenges remain. One issue is that most board appointments come from the C-suite level and from the pool of corporate CEOs, in particular. The number of black CEOS at the corporate level has shrunk in recent years. Chenault actually discussed this issue with BE in a recent interview.
“We have a long way to go,” said Chenault. “As I’ve said publicly, I think it’s embarrassing that the number of African American CEOs has actually been reduced from eight years ago. That’s a serious problem. From an African American perspective, we are underrepresented. We can talk all the theories we want. People talk about the complexity of this issue. I know that there are very qualified people. They just haven’t gotten the opportunity.”
While it’s important to celebrate the achievement made in diversifying American corporate boards, there is still the need to build up the pipeline of qualified black executives that can ascend to the C-suite.