National protests following the death of George Floyd in May 2020 ushered in calls for change across a variety of spaces badly in need of reform. Company boards began responding with increased diversity in the latter half of 2020, a positive trend that has continued to influence board composition in 2021, at least among Black director nominations, according to the recently-released 2022 report by Heidrick & Struggles.
The report, which tracks and analyzes trends in non-executive director appointments to the boards of the Fortune 500, notes “an infusion of fresh thinking by reaching out to groups of people from increasingly diverse backgrounds.” Specifically, it shows that while many boards had nomination processes in place to account for race and gender before 2020, at least three-fourths of Black director nominations occurred after Floyd’s murder.
In 2020, Black directors received 28% of new board seats, a significant jump from 10% in 2019. Those numbers held steady in 2021, with Black directors receiving 26% of new board seats. However, progress hasn’t been quite as noticeable for several other underrepresented groups, especially in the second half of 2021.
We’ve highlighted key points from the past two Heidrick & Struggles’ reports below:
- Latinx and Asian or Asian American directors continue to be underrepresented on boards. Only 9% of new seats went to Asian directors and 4% went to Latinx directors in 2020 (men and women). Those numbers stayed roughly the same through 2021. While white and Black director appointments had a more even split by gender – 50% male and female – the numbers for Latinx and Asian or Asian American women directors was lower at around 30%.
- Boards are expanding the criteria for new directors. In 2020, 62% of new seats filled did not have CEO experience and 38% had not previously served boards. Those numbers stayed consistent for 2021. It points to how nomination committees are now looking beyond the C-suite, valuing experience either within the same field or outside of the sector and personal networks, opening more opportunities for diverse directors.
- Companies must not lose focus on diversity and should avoid trade-offs of one form of diversity at the expense of another. Despite the rise of female nominations from 2020 to 2021, the numbers for Latinx and Asian or Asian American nominations continue to remain less than 10%. In the second half of 2021, the percentage of appointments for underrepresented candidates also dropped drastically, from 51% of the appointments in May to 24% in December. Will that continue to be the case for 2022 numbers?