The number of new Black directors surged to 28% of the board seats filled by Fortune 500 firms, almost triple the 10% of new directors appointed in 2019 after years of little progress. Last year's intensified focus on social and economic inequity contributed to the strong rise in both Black men and women appointed as directors. Three-quarters of the appointments were made after the
"Last year, corporate America was forced to take a long look at the issues faced by underrepresented groups that were not widely understood or seen," said
Decrease In Women Appointees, and Latinx, Asian and Asian American Appointments Mostly Flat
While Black directors saw significant increases, others were mostly flat – the share of new Latinx directors fell one percentage point from 2019 to 4%, and Asians and Asian Americans only edged up one percentage point to 9%.
New women directors' share of seats dropped to 41% from a record 44% in 2019, reversing the upward trend since the report began in 2009 with the exception of a slight stumble in 2016.
"We consider it crucial that boards not trade one form of diversity for another," said
The report advises boards to explore simple steps to develop a holistic, long-term approach to ensure the best board composition, whatever economic and society disruptions occur. In some instances, simply adding another director would multiply the options for adding diversity of background and thought alongside other essential governance skills. Fully assessing how boards fill their seats also could help meet board composition goals.
Boards Shift from Traditional Director Experience to Deeper Industry Experience and First-Time Directors
While CEOs and CFOs still made up the majority of board appointments, 2020 marked a shift from a slow decline in their prominence among incoming directors to a sudden drop off. The percentage of current or former CEOs and corporate financial officers named to board seats dropped to the lowest mark in the study's history, sliding to 51% from 62% in 2019. At the same time, previous experience within the same industry increased across most industries from the previous year, and boards showed a willingness to bring on first time directors, signifying their desire to seek deep industry expertise during a year of disruption and uncertainty. In fact, more than one-third (38%) of appointees had no previous board experience compared to 28% in 2019.
Excluding CEOs and CFOs, 41% of new directors had previous experience in other C-suite positions; 22% in profit and loss (P&L) leadership posts; 15% as divisional or regional CEOs or leaders; and 11% with military, government or academia experience, among others.
"There were notable rises in the share of new directors from the same industry on the boards in almost every sector," noted
Other key findings in the latest annual study include:
- Fifty-seven percent had active careers and 43% were retired with the average age of 58 versus a 50-50 split and an average age of 59 the prior year.
- As for career experience, those with international roles fell to 60% from 64% in 2019, while those with financial risk/compliance experience climbed to 21% from 12%.
- Those with cybersecurity talent dropped to 8% in 2020 from 14% the previous year, and sustainability experience declined to 6% in 2020 from 10% the previous year.
- The number of new board seats filled fell 9% to 425 from a record high of 467 the previous year.
Information about executives is gathered from publicly available sources, global data company BoardEx, and
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