Boards of Fortune 500 companies appointed a record share of first-time directors in 2021, according to a report from executive recruiting firm Heidrick & Struggles.
The firm's Board Monitor U.S. 2022 report cites the COVID-19 pandemic and calls for racial and social justice following the murder of George Floyd as primary drivers for corporations to focus more attention on board diversity.
A total of 449 board seats in 2021 were filled with first-time board directors, a record high of 43% of all board seats, up from 38% in 2020 and 28% in 2019, and 45% of all those new board seats were filled by women directors, up from 41% in 2020.
Also in 2021, 41% of new directors were considered racially or ethnically diverse, equal to 2020.
"The unprecedented events of the past two years have significantly altered the nature of corporations' license to operate — the fundamental contract is changing between organizations, their stakeholders and the communities in which they do business," said Bonnie Gwin, vice chairwoman and co-managing partner of Heidrick & Struggles' global CEO and board of directors practice, in a news release Wednesday announcing the release of the report.
"Boards continue to seek fresh thinking as evidenced by the appointment of directors with more diverse backgrounds," Ms. Gwin said. "And the truly cutting-edge boards are taking a strategic, holistic approach to board succession by continuously monitoring refreshment opportunities to meet today's challenges and respond with resilience when the unexpected occurs."
When looking at the share of total seats held, those held by Black directors was down slightly to 26% from 28% in 2020, while the share of Asian or Asian-American and Hispanic directors remain at 9% and 6%, respectively, continuing to show little or no movement in recent years.
The report also noted that Fortune 500 companies are continuing to emphasize the placement of active executives rather than retired executives on board. Of total board seats, 62% were held by active executives, up from 57% in 2020 and 50% in 2019.
The percentage of directors on boards with sustainability experience also rose in 2021, to 14% from 6% in 2020.
The report is available on Heidrick & Struggles' website.
