The corporate boardrooms of the nation’s largest companies have fewer men – and fewer white men – than they did just two years ago.
New data shows that companies in the S&P 500 shuffled their slate of corporate directors after the murder of George Floyd, adding more African Americans and more women of color to the line-up.
In raw numbers, Hispanic and Black women saw some of the biggest gains, though they still trail their participation in the workforce, according to a USA TODAY analysis of information compiled by data firm DiversIQ.
Hispanic women, who are 7.3% of the workforce, hold 3.1% of board seats. Black women have 4.6% of board seats but account for 6% of all U.S. workers.
If corporations keep up the current rate of change, Black women and Hispanic women could reach parity in the boardroom in the next year or two, USA TODAY found.
For years, corporations have pledged to right historic racial and gender inequities on overwhelmingly white and male corporate boards. Following the national uprising over Floyd's death under the knee of a white police officer, pressure from investors and regulators intensified.
California even passed laws requiring publicly traded companies headquartered in the state to add women and people from underrepresented groups to their boards of directors or face hefty fines. The laws were effective in boosting diversity on boards but were struck down in the courts.
As the nation gets less white and more diverse, corporate America is adapting to better serve that changing market. Studies have linked board diversity with better financial performance and returns for investors.
Board members, who are appointed by the company and then voted on by the shareholders, hail from a wide range of industries and backgrounds. For executives, these part-time gigs confer prestige, power and a paycheck. At the largest 100 companies, board member compensation tops $300,000.
A woman looks at a mural on the wall of Cup Foods during a vigil for George Floyd on May 25 in Minneapolis. It has been two years since George Floyd was killed by Minneapolis Police.
“Prior to 2020, you wouldn't have people publicly talking about structural or systemic racism in boardrooms and in C-suites and now it happens all the time,” said James D. White, a veteran corporate executive who sits on the boards of Honest Company and Affirm and is author of "Anti-Racist Leadership: How to Transform Corporate Culture in a Race-Conscious World." "The fact that the conversation has changed gives us at least some opportunity to make progress in the real world that impacts people’s lives.”
The number of men and white men in board seats is declining
Since May 25, 2020, the day Floyd was killed, the number of Black board members at S&P 500 companies increased to 11.7% from 8.4%. The representation of people of color on corporate boards also increased, accounting for nearly 23% of board seats today up from about 18%.
S&P 500 companies have changed more than 1,000 board members in that period, with 43% of those seats going to directors of color and nearly 26% to African Americans.
Of the 500 companies, 225 have added at least one Black director. A far smaller number – 32 – have added two Black directors. Only three companies – American Express, Crown Castle and First Energy – have added three.
At the same time, the once ironclad grip of men – especially white men – on corporate board seats is slipping, the USA TODAY analysis shows.
Men account for 53% of the U.S. workforce and are 36% of board members today, down from 72.2% in 2020. White men, who held 60% of board seats in 2020, now hold 23%. They still make up more than half – 54% – of executives at the nation’s largest companies.
Of the S&P 500, 343 companies have boards where white men hold half or more of the seats. There are17 companies where they hold 75% or more, including Kinder Morgan, Charter Communications, Southwest Airlines, United Airlines, DISH Network, Fox Corp., and Sysco. That is down from 2020 when 418 company boards were at least 50% white male and 72 companies were at least 75% white male.
“Boards up until recently have been pretty entrenched,” said Lisa Wardell, executive chairman of AdTalem Global Education who sits on the board of American Express. “That is changing.”
The push for greater diversity made room for more white women, who are 30% of the U.S. workforce. They were 22% of corporate directors in 2020. Today, they hold 54% of seats, more than doubling their ranks on corporate boards.
Black men now hold a higher percentage of board seats – 7.1% – than their representation in the U.S. workforce – 5.2%.
“Boards up until recently have been pretty entrenched,” said Lisa Wardell, executive chairman of AdTalem Global Education who sits on the board of American Express. “That is changing.”
Boards are getting more diversity, the executive suite not so much
Leading business and diversity scholars warn against placing too much stock in the composition of corporate boards, which they say are often window dressing to conceal the lack of diversity in the executive suite.
Even as corporate boardrooms have added African Americans, the executive suite has not, and that includes companies with diverse boards.
Take Black women as an example. They hold 4.6% of corporate board seats but only 1.9% of executive jobs, according to USA TODAY analysis of available workforce data. Black men hold 7.1% of board seats but only 2.5% of executive roles.
The demographic differences between the boards and executives can be illustrated by two companies with significant numbers of people of color among their corporate directors.
About 60% of board seats at both Accenture and Mastercard are held by nonwhite people. Yet, their executive leadership looks different. Only 17% of executive jobs at Accenture and 30% of those posts at Mastercard are held by nonwhite people.
Still, having a diverse board is a critical step to making real change inside American corporations, Wardell said.
“Boards hire and fire CEOs. Period. Full stop,” she said. “It takes a diverse board, for the most part, to hire a diverse CEO.”
