Board Diversity, and SCOTUS Affirmative Action for DEI

Earlier this year, we extended our coverage of Boards of Directors of the S&P 500 and Russell 1000, adding the breakout out leadership positions – chairperson, chairs of committees, and lead independent director.
The focus of shareholder engagement in the last few years has been mostly focused on board diversity policies/strategies, transparency of diversity disclosures, and pushing for increased board representation overall.
However, we have seen an increased push for increasing the diversity of board leadership, and several of our clients have proprietary signals showing a strong correlation between board leadership diversity and performance.
Today, we’re taking a quick look at trends in board diversity for the S&P 500 since the end of 2016:
  • Overall, diverse representation (gender or race/ethnicity) has increased from just over 32% to near parity today
  • The share of women has gone from under 21% to more than a third
  • People of color now make up more than a quarter of board seats, up from just 15.6%
In terms of board leadership, women are better represented while people of color are lagging. Looking at all board committees:
  • Diverse individuals (women or people of color) chair 46.6%
  • Women chair 34.4%
  • People of color chair just 19.0%
If we look at just the 3 main committees (audit, compensation, and governance):
  • Diverse members chair 49.2%
  • Women chair 37.3%
  • People of color chair 19.8%
  • 51 of the S&P 500 have diverse members chairing all 3 committees
  • 15 companies have women chairing all 3
  • Just 3 companies have people of color as committee chair of all 3
And here is a look at how diverse the chairperson of the boards are:
  • Diverse members hold 17.9% of chairs overall
  • Women chair just 9.8% of S&P 500 companies
  • People of color hold just 8.8% of
Part of the underrepresentation can be attributed to companies where the CEO is also the chair – here is a look at CEO representation
  • Diverse individuals lead 22.1% of S&P 500 companies
  • 8.3% of companies have a women CEO
  • People of color lead 14.8% of companies

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Affirmative Action Ruling And What It Means For Public Companies


Soon after the Supreme Court ruling striking down affirmative action in college admissions, thirteen Republican state attorneys generals sent a letter to the CEOs of all Fortune 100 companies reminding them of their “obligations as an employer under federal and state law to refrain from discriminating on the basis of race, whether under the label of ‘diversity, equity, and inclusion’ or otherwise.”


We’re getting a lot of questions on how this Supreme Couty ruling is going to affect the DEI programs of the country’s largest public companies. 


We’ll write more about this soon…in the meantime, here’s what we’re reading:  


Reading List

Feel free to schedule time with us below to discuss further.

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