Last year, of the 462 newly appointed Fortune 500 board members, 183 of them – or 40% – were women, according to a new report from executive search firm Heidrick & Struggles. That’s more than double the rate from a decade ago and the highest on record.
At this pace, Heidrick expects women will be named to Fortune 500 boards in equal numbers as men by 2023.
The recent surge in women appointees has been driven by a few factors, according to the report: Boards are starting to make diversity a priority. They’re also being held accountable for it through outside influences, such as a new law in California that mandates there be female directors at public companies.
And directors have said that they are also feeling pressure from customers and younger employees to step it up.
The #MeToo movement may have increased this sense of urgency, the report notes.
Still a long way to go for women and minorities
Despite the progress made among new appointees, women still only represent 22.5% of all Fortune 500 board directors. That’s up from roughly 16% in 2010, according to a separate report from the Alliance for Board Diversity and Deloitte.
Progress has been even slower for minorities.
Racially and ethnically diverse candidates – men and women combined – constituted 23% of new board appointees last year, unchanged from the all-time high in 2017. And they account for a much smaller share of all Fortune 500 board directors.
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Heidrick notes the overall growth in board diversity is “real but still disappointing.”
Beyond their usual preference for existing CEOs, a notoriously male-dominated group, boards should consider excellent general managers and division heads, retired public servants of large government agencies and retired military officers when recruiting new members, Heidrick suggested. And they should look for fast-rising younger executives.
The executive search firm itself has pledged that at least 50% of the board candidates it presents to clients for consideration every year will be diverse.
Efforts to boost gender, ethnic and racial representation on boards are supported by research that suggests companies with greater diversity in the C-suite and in the boardroom perform better financially.
The ultimate goal of those who advocate for more women on boards is gender parity – meaning the number of women and men directors are evenly split. As of March this year, only seven companies in the Fortune 500 had achieved that, according to data from Equilar: Viacom (VIA), Ulta Beauty (ULTA), Casey’s General Stores (CASY), Ascena Retail Group (ASNA), CBS, Best Buy, Omnicom Group (OMC).