Board diversity at the largest U.S. companies is on the upswing, with racial and ethnic minorities now accounting for a record 20% of all board directors, according to an analysis released Tuesday by ISS Corporate Solutions.
The Institutional Shareholder Services subsidiary looked at the largest 3,000 U.S. companies over a four-year period from January 2019 to January 2023 and found growth in the proportion of directorships held by all racial and ethnic minorities.
An ISS Corporate Solutions spokesman said in an email that after tracking board representation numbers for years, this is the first time that minority directorships crossed the 20% threshold for the top 3,000 U.S. companies.
Asian directors saw a 55% increase in directorships during the period studied, while the number for Hispanic/Latin Americans grew by 37%, Middle Eastern/North Africans by 38% and Native American/Alaskan Native/Native Hawaiians by 33% The proportion of directorships held by Caucasian directors, now 79.9% of all director seats, fell by 9%.
The most pronounced growth — 90% — in the period studied was among Black directors who now represent 8.3% of directors, CSI found.
Black directors also gained more influence, with the proportion of Black lead directors rising to 4.7% from 1.9% in 2019 and made gains on nominating committees. The number of Black CEOs grew to 75 from 66 during the period of study, while the proportion of Black chairs declined to 1% from 1.3%.
Marija Kramer, managing director and head of ISS Corporate Solutions, called it a watershed moment for minority corporate directors, even though their proportional numbers are behind the U.S. population overall, and credited investors for the change.
"The analysis shows the impact of increasing and continual institutional investor engagement with portfolio companies on matters around board diversity coupled with growing stakeholder pressure from various quarters over the past two years," Ms. Kramer said in a news release about the analysis.