Corporate boards have made a genuine effort to diversify their ranks in the five months after the murder of George Floyd sparked Black Lives Matter protests across the U.S. The racial justice movement has led to 130 Black board members being appointed at Russell 3000 companies according to research conducted by board recruitment platform BoardProspects. In the prior five months Russell 3000 companies appointed only 38 Black board members.
The appointment of so many Black board members in such a short period of time shows that diverse board candidates are available and ready to serve, but companies must make a genuine commitment to finding them.
In an interview with Corporate Board Member, BoardProspects CEO Mark Rogers said, “This is tangible evidence of moving forward in terms of really acknowledging the need for diversity. This represents a 240% increase in the five months after George Floyd’s murder compared to the five months before. I think corporations are realizing they have to take action and it has to be a top-down approach.”
The BoardProspects report noted that Dick’s Sporting Goods, Zogenix, BorgWarner and Pinterest were corporations that went from having zero Black board members to appointing two. Ralph Lauren and Crown Castle also added two Black board members, increasing from one to three. Notable corporations that did not have a Black board member, but have since added one include Adobe, iHeartMedia, Expedia, Under Armour, Procter & Gamble, Hilton, Chipotle, SiriusXM, Wynn Resorts, Intuit and Citrix. Of the 130 appointments in the last five months, 72 were men and 58 were women.
Although there has been legislation passed in California that seeks to mandate board diversity, Rogers says Black board appointments in the Russell 3000 have accelerated because “the institutional investors are talking about the need to improve diversity. That is what’s moving the needle as part of the social justice movement.”
The largest institutional investors such as Vanguard and Blackrock have publicly pressured boards to diversify but they have emphasized the appointment of women to boards. This research suggests that conversations about the appointment of other diverse groups to boards are happening behind closed doors—and companies are listening. That’s a very positive sign for advocates of board diversity.
Of course, the big question is, will Black board appointments continue at a reasonable pace as media attention on the social justice movement fades? Since board seats don’t come available very often and since there have been a solid number of new appointments of women and underrepresented groups to boards over the last two years, it’s likely board appointment numbers for diverse groups will not be as high next year. However, it’s not unreasonable to expect that the appointment numbers for diverse groups should trend higher than in previous years when there was less attention given to board diversity.
If institutional investors continue pressuring boards to diversify, companies will keep considering diverse candidates when board seats come open. Institutional investors believe boards with diverse members make better decisions for shareholders. And that is a trend that should benefit everyone.
