Zillow Group and Nextdoor.com are among companies pledging to add their first Black directors within the next year, as part of a corporate challenge launched Wednesday to encourage board diversity. United Airlines Holdings committed to add a second Black board member.
The Board Challenge, a group of 43 companies, will advocate for corporate boards to draw from a wider pool of candidates to give more executives opportunities to serve. Some members, like United, Verizon Communications and Merck & Co., already have Black directors.
Companies with no Black directors are under pressure after a summer of unrest related to the killing of George Floyd by police as well as the disproportionate toll of COVID-19 in minority communities. Investors have been suing boards that lack Black directors as well as calling for additional disclosure of the racial breakdown of the boardroom. California's legislature passed a law last month that, if signed by the governor, will require companies based there to have at least one minority director by the end of next year and will compel many to have three by 2022.
About a dozen of the largest U.S. companies still lack a Black director, according to data gathered by Bloomberg News during the last few months.
Black directors accounted for only about 10% of new board seats in 2019, down from 11% in the previous two years, as appointments of minority candidates stalled, according to a separate report released Wednesday by executive recruiter Heidrick & Struggles. Almost three-quarters of the directors appointed last year had served on boards in the past, a hiring criterion that Heidrick found to limit opportunities for minority candidates, who often lack such experience. In contrast, the recruiter now predicts women will be half of new board members by 2022.
An initiative announced Tuesday, the Board Diversity Action Alliance, also aims to encourage more companies to either appoint a first Black director or add more. It urges boards to disclose the self-identified race and ethnicity of all directors. The alliance is led by former Xerox Holdings Corp. CEO Ursula Burns and her current company, the CEO advisory firm Teneo, along with the Ford Foundation and the Executive Leadership Council. The initial seven member companies — Dow, Macy's, Mastercard, PNC Financial Services Group, Uber Technologies, United Parcel Service and WW International — already each have at least one Black director.
