There has been a lot of talk about how to increase racial and ethnic diversity on U.S. corporate boards as well as many initiatives to help nominating committees identify candidates from under-represented groups. To assess the current situation, ISS Corporate Solutions took a look at the diversity trend in the Russell 3000 over five years, with a special focus on Black/African American directors in recognition of Black History Month.
Key Takeaways
- For the first time, minority directors occupy more than 20% of board seats among Russell 3000 companies
- Black/African Americans saw the highest increase in directorships, a rise of more than 90% between 2019 and 2023
- There were significant increases in Black/African American representation across all industries except Utilities, a sector that has long seen the highest Black/African American representation
- Black/African American CEOs and board chairs continue to be extremely rare, at around 1% of the total
The proportion of Caucasian/White directors in the Russell 3000 declined by 9% during the period falling below four-fifths for the first time. At the same time, the proportion of directors from minority groups, including Black/African American, Asian and Hispanic/Latin American, increased. While the changes were large in some cases, the proportion of minority-held directorships grew by only a percentage point or so in most years. Native American/Alaskan Native/Native Hawaiian directors continue to represent the smallest proportion of directors among minority groups. Black/African American directors have overtaken Asian directors in percentage terms. The pace of change for Black/African American directors began to accelerate in 2021 during the pandemic and in the wake of Black Lives Matter movement.
