Minority representation in U.S. boardrooms hits 20%

Led by an increase in black directors, racial or ethnic minorities now hold 20% of U.S. corporate board seats, according to new research from ISS Corporate Solutions, Inc. (ICS).

The firm’s analysis of boards at the 3,000 largest U.S. companies found that, for the first time, racial minority directors account for one-fifth of all board seats.

The analysis, which covers the period from Jan. 1, 2019, through Jan. 1, 2023, shows that each of the racial and ethnic minority groups analyzed saw growth in their proportion of directorships.

The number of board seats filled by black directors saw the fastest growth rate, rising by 90% over the study period, ICS said, noting that 8.3% of all board seats are now held by black directors.

“Though their proportional numbers remain behind those of the U.S. population as a whole, these figures nevertheless represent a watershed moment for minority corporate directors broadly and black directors in particular,” said Marija Kramer, head of ICS, in a release.

“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,” she added.

In addition to an increase in the overall number of black directors, these directors “also saw notable gains in positions of influence over the direction and composition of boards,” ICS said.

Specifically, it reported that the proportion of black lead directors more than doubled, rising from 1.9% in 2019 to 4.7% this year, and the share of nominating committee positions held by black directors also jumped from 5.4% to 9.9% over the same period.

The number of black CEOs grew modestly from 66 in 2019 to 75 this year; and the proportion of black chairs declined from 1.3% to 1.0%.

The improvement in board diversity was evident across all sectors, except for the utilities sector, which already had the highest proportion of black directors at 12%, the firm said. The largest increases came in the energy and real estate sectors. The energy sector had the lowest share of black directors back in 2019.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.