Boardroom diversity in Fortune 100 and Fortune 500 companies has increased for women and certain minority groups, according to the "Missing Pieces Report: The 2016 Board Diversity Census of Women and Minorities on Fortune 500 Boards," a multiyear study published by the Alliance for Board Diversity (ABD), collaborating with Deloitte for the 2016 Census. However, minority men and women have experienced only slight gains in the last six years, since the ABD first started tracking Fortune 500 board diversity in 2010, up from 12.8 percent in 2010 to 14.4 percent in 2016. The total number of board seats also has not changed much during this time; there were 5,440 total board seats in the Fortune 500 in 2016, compared to 5,463 in 2010.
Key findings include:
- In 2016, fewer than 15 percent of all board seats in the Fortune 500 were held by minorities, including African Americans/blacks, Asian/Pacific Islanders and Hispanics/Latino(a)s.
- Some progress has been made for African Americans/blacks in securing/holding Fortune 500 board seats, with the bulk of the African American male increases occurring within the Fortune 100. There has been an increase in the Fortune 500 of African American women board members by 18.4 percent, while the total number of African American male board members in the Fortune 500 had only an increase of 1.0 percent. African Americans/blacks appear to have the highest rate of individuals serving on multiple boards – indicating that companies are going to the same individuals rather than expanding the pool of African American/black candidates for board membership.
- Asian/Pacific Islanders have shown continued growth in percentage representation on Fortune 500 boards. However, their starting baseline was small – the overall representation of Asian/Pacific Islanders is only 3.1 percent, representing a total of 167 seats.
- Hispanic/Latino men picked up a nominal gain of eight board seats, while there was a loss of two Fortune 500 board seats for Hispanic/Latina women since 2012. Overall, Hispanic/Latino(a) men and women hold 188 total board seats, or 3.5 percent of the total.
"The increase in boardroom diversity over the last four years is a small step in the right direction – but it's equally important to note the larger context in which these gains were made. Almost 70 percent of board seats in the Fortune 500 are still held by Caucasian/white men, and at the current rate of progress, we won't likely see the number of women and minorities increase to ABD's target of 40 percent board representation until the year 2026. This is not acceptable," said Ronald C. Parker, ABD chair and president and CEO of The Executive Leadership Council. "A great deal of work remains for corporate board composition to keep pace with the changing demographics of the country at large."
In addition, the report includes data for the Fortune 100 – showing these companies lead the growth in boardroom diversity, outpacing the Fortune 500 with 35.9 percent of women and minorities holding board seats, compared with 30.8 percent in the Fortune 500. Currently, 65 percent of Fortune 100 boards have greater than 30 percent board diversity, compared to just under 50 percent of Fortune 500 companies in the census. However, since the ABD began conducting its census of Fortune 100 board directors in 2004, collective gains for women and minorities have been minimal. In 2016, women and minorities held 35.9 percent of board seats in the Fortune 100, compared to 30.1 percent in 2010 and 28.8 percent in 2004.
Other findings include:
- Representation of minorities within the Fortune 500 is smaller than in the Fortune 100, where minorities held nearly 20 percent of board seats. Minority men have gained only 1.0 percent in the period 2004-16, and today 82.5 percent of total Fortune 100 seats are held by Caucasian/white individuals.
- While nearly 50 percent of Fortune 500 boards have reached at least 30 percent women and minorities on their boards, the "recycle rate" – or rate at which individuals serve on more than one board – is higher for women and minorities than Caucasian/white men, which indicates that while diversity on boards may be increasing, there needs to be a broader net cast to capture "new" women and minorities on boards. This rate also points to the need to look at a broader set of networks, backgrounds, skills and experiences in potential board candidates.
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