Good morning, Broadsheet readers! The Williams’ sisters legacy is clear at the U.S. Open, the Academy Awards released new diversity requirements, and progress on board diversity in 2019 wasn’t evenly distributed. Have a lovely Thursday.
– Leaps and bounds. The movement to create gender diversity on boards of directors is one that has seen marked success in the past decade, including 2019, when 44% of new appointees to Fortune 500 directorships were women, according to an annual report by Heidrick and Struggles released this week.
But the progress companies have made in choosing qualified women for their boards is tempered by the outright failure of those same companies to prioritize racial diversity in their governance. While new appointments in 2019 came close to gender parity, businesses were far from achieving racial representation last year. For the past three years, the share of new board seats filled by nonwhite candidates has remained stalled at 23%. Between 2018 and 2019, the percentage of new board members who were Black fell from 11% to 10%.
The executive search firm notes this failure in stark terms in its report: “Racial or ethnic, nationality, and age diversity improvements have been disappointing with little progress to report anywhere in the world.”
The firm’s survey covers 467 total director seats filled in 2019. And, of course, these numbers only cover new appointments. It’s harder to move the needle on overall board composition, as existing directors stay in their positions; women held 27% of board seats in the Fortune 500 last year, compared to 44% of these new openings.
As societal attention remains fixed on racial justice, decision-makers are “finding they can do much better” in building businesses that reflect the communities they serve, Heidrick and Struggles’ report noted.
The good news? Other trends highlighted in the report hint that progress may be on the horizon. While companies still overwhelmingly prefer board candidates with prior public board experience—72% of this year’s new picks had that record—they’re slowly accepting different kinds of leaders. Directors with CEO experience—a requirement that has shut out many female and nonwhite candidates—made up 50% of new board members last year, down from 60% the year prior.