The number of Fortune 500 companies with over 40% diversity on their boards has nearly quadrupled since 2010, according to the latest ‘Missing Pieces Report: A Board Diversity Census of Women and Minorities on Fortune 500 Boards’, published by the Alliance for Board Diversity (ABD) in collaboration with Deloitte.
According to the report, however, it will take until 2074 before the number of Fortune 500 board seats held by minorities reaches the ABD’s aspirational 40% board representation rate.
Women and minorities have made more progress in board representation between 2016 and 2020 than between 2010 and 2016, yet the average growth for minority representation on boards since 2004 is less than 0.5% per year.
Fortune 500 board representation for women and minorities continues to climb, however, up from 34% (1,929 board seats) in 2018 to 38.3% (2,253 board seats) in 2020. Since 2010, the number of companies with greater than 40% diversity has nearly quadrupled.
Deloitte noted that the social justice movements of 2020 “served as a wake-up call for many in corporate America, accelerating the focus for greater gender, ethnic, and racial diversity in the boardroom”.
It added that the “business case and benefits of diversity—of background, experience, and thought—are evident, and many companies have listened”.
Nonetheless, while 29 companies demonstrate 60% or greater women and minority representation, no companies in the Fortune 500 are representative of the demographics of the United States, with the benchmarks of 50% women, 13% African American/Black, 18% Hispanic/Latino(a), and 6% Asian/Pacific Islander per the most recent (July 2019) United States Census Bureau, Population Estimates Quick Facts.
Linda Akutagawa, chair for the Alliance for Board Diversity and president and CEO, LEAP (Leadership Education for Asian Pacifics) said: “While we applaud the progress that businesses have made in increasing board diversity, we need to ensure representation is holistic and inclusive for all – not just for one segment of an underrepresented population.
“Despite heightened focus on board diversity the past year, not a single Fortune 500 boardroom is representative of the population of the US.”
Carey Oven, national managing partner, Center for Board Effectiveness and chief talent officer, Deloitte Risk and Financial Advisory, Deloitte and Touche LLP, added: “The Missing Pieces report shows that while considerable progress has been made, and that companies are moving in the right direction in terms of equal representation on boards, there is still work to be done.
“We hope, and encouragingly, are starting to see boardrooms reflect on this information and apply it to ensure a more inclusive process for recruiting not just future board members, but influencing management as well.”