Collectively, women and minorities lost ground in America’s corporate boardrooms between 2004 and 2010, according to “Missing Pieces: Women and Minorities on Fortune 500 Boards―2010 Alliance for Board Diversity Census.”
Six years after the first ABD Census, a new report released today, shows that white men still overwhelmingly dominate corporate boards with few overall gains for minorities and a significant loss of seats for African-American men.
In the Fortune 100, between 2004 and 2010, white men increased their presence, adding 32 corporate board seats, while African-American men lost 42 seats, and women―particularly minority women―did not see an appreciable increase in their share of board seats.
[For a global snapshot on the number of women corporate directors, see "Keeping Count," (April/May 2011, NACD Directorship).]
In the Fortune 500, which is included in this year’s report as well, the overwhelming majority of seats were held by white men.
The study was compiled by the Alliance for Board Diversity (ABD)–a collaboration of leadership organizations founded in 2004 to promote women and minority representation on boards. ABD is comprised of Catalyst, The Executive Leadership Council (ELC), the Hispanic Association on Corporate Responsibility (HACR), Leadership Education for Asian Pacifics (LEAP), and The Prout Group.
“With so many qualified women and minority candidates available for board service, it is staggering to find that no real progress has been made in the past six years to advance minorities and women into the boardroom,” said Ilene H. Lang, chair of ABD and president and CEO of Catalyst. “Research has shown that diverse teams produce better results. In particular, Catalyst research revealed that more diverse boards, on average, are linked with better financial performance. Corporate America has the opportunity to seize the advantage that a more diverse board can yield in this increasingly competitive global economy.”
Key findings from this report include:
In the Fortune 100, between 2004 and 2010:
• Men still dominated boardrooms. In 2010 they held 82.0 percent of board seats; in 2004, 83.1 percent.
• White men have actually increased their share of board seats in Corporate America―from 71.2 to 72.9 percent. Minorities and women shared the remainder, with very few seats occupied by Asian Pacific Islanders, Hispanics, or minority women in particular. With the exception of African-American men, who lost seats, the percentages have not changed notably since 2004.
• More specifically, African-American women held 2.1 percent of seats; Hispanic women held 0.9 percent; Asian Pacific Islander women held 0.5 percent; African-American men held 4.2 percent; Hispanic men held 3.1 percent; and Asian Pacific Islander men held 1.7 percent.
• Although women gained 16 board seats―7 occupied by minority women―the overall 1.1 percentage point increase over 6 years was not appreciable.
“We were disappointed with the results from the latest ABD report,” said Pat Prout, president and CEO of The Prout Group, an executive recruitment firm. “From a search firm perspective, we know that nominating committees often desire diversity when considering board candidates. It is evident, however, that they are not getting it.”
In 2010, the ABD expanded its research to include companies in the Fortune 500.
• Fortune 500 boards were less diverse than Fortune 100 boards.
• Men held close to 85 percent of all board seats. White men dominated the boardroom, holding 77.6 percent of board seats. Minority men held 6.8 percent. White women held 12.7 percent. Minority women held 3.0 percent.
• More specifically, African-American women held 1.9 percent of Fortune 500 board seats; Hispanic women held 0.7 percent; Asian Pacific Islander women held 0.3 percent; African-American men held 2.7 percent; Hispanic men held 2.3 percent; and Asian Pacific Islander men held 1.8 percent.
• Approximately one-half of Fortune 500 company boards were composed of 20 percent or fewer women and/or minorities.
• Women and minorities were significantly underrepresented in Fortune 500 board leadership positions. White men held 94.9 percent of board chair positions.
• There was not a single Latina lead director or board chair.
• In 2010, 15 companies achieved broad board diversity: each of the major U.S. Census groups was represented in their boardrooms.
“Few will debate that inclusion and the diversity of thinking that it brings to business challenges creates real shareholder value,” said Arnold W. Donald, president and CEO of ELC. “That’s why the decline in the collective presence of underrepresented groups on the boards of America’s largest corporations as reported in this study is more than a little concerning. We at ELC together with our ABD partners plan to make a meaningful contribution in helping America’s corporations address this missed opportunity.”
HACR President and CEO Carlos F. Orta said: “Companies that want to achieve success in a global marketplace need a board that reflects the communities in which they do business as well as the population overall. Ensuring Hispanic representation on their board of directors and in the executive suite is essential to achieving this diversity. HACR’s goal is to increase Hispanic presence on corporate boards and executive staffs, which will help to identify best practices in the area of corporate responsibility.”
J.D. Hokoyama, LEAP president and CEO, echoed the sentiments of his collaborators. “While Asian and Pacific Islander (API) representation on corporate boards has increased over the past decade, APIs are still woefully underrepresented in leadership roles,” Hokoyama said. “As part of our ongoing efforts to achieve full participation for APIs, LEAP’s multi-pronged approach of developing people through our leadership development programs; measuring representation through LEAP research; and informing society at large through multiple venues including our reports and key partnerships like ABD are helping to further empower our communities in addressing this critical issue.”