The level of diversity on America’s biggest corporate boards has never been higher. But it’s still far from on par with what US society looks like.
White women and minorities made up 38.3% of Fortune 500 board seats in 2020, up from 34% in 2018, according to a new study released Tuesday by the Alliance for Board Diversity in collaboration with Deloitte.
And since 2010, the number of companies with greater than 40% diversity (including women) has almost quadrupled.
Yet the average growth rate in minority representation on Fortune 500 boards has remained unchanged – at less than half a percent (0.5%) a year – since 2004.
“The progress made on overall diversity has largely been due to the increase of White women on boards,” the study noted.
Meanwhile, the “recycle rate” of board members – that is, one person serving on multiple boards – has gone down for all groups, the report found. But in 2020, more than a third of diverse board seats were still held by people serving on multiple Fortune 500 boards. And the rate was highest among Black directors – more than two of every five seats held by Black members were held by someone serving on multiple boards.
As of 2020, minorities held 18% of Fortune 500 board seats. And based on the average growth rate, the report estimates that it could take until 2074 before they hold 40%, which would be well after non-Hispanic Whites are projected to no longer be the majority of the US population.
Overall, the report found that no companies in the Fortune 500 have boards that are representative of the demographics of the United States, with the benchmarks of 50% women, 13% African American/Black, 18% Hispanic/Latino(a), and 6% Asian/Pacific Islander.
“While we applaud the progress that businesses have made in increasing board diversity, we need to ensure representation is holistic and inclusive for all – not just for one segment of an underrepresented population,” said Linda Akutagawa, chair for the Alliance for Board Diversity.
The ABD/Deloitte report, titled Missing Pieces, is in its 6th edition and is based on analysis of public filings, public information, independently verified insights, third-party research data, previous diversity studies and direct communications with Fortune 500 companies.