Heidrick & Struggles recently issued its report on 2021 board composition trends among Fortune 500 companies. The report says that boards have continued a trend that began in the second half of 2020 of reaching out to groups of people from increasingly more diverse backgrounds. It concludes that 2021 changes in board composition were mostly incremental but generally positive. Here are some of the highlights:
– A record share of seats (43%) was filled by first-time public company directors. On the whole, these directors bring more diversity of experience and background, and there was an increase in the share of seats that went to directors with sustainability and cybersecurity experience.
– A record share of seats (45%) went to women, but there was only mixed progress on racial and ethnic diversity. The share of seats filled by Black directors held relatively steady at 26%, after a sharp rise in 2020. However, both Asian or Asian American (9%) and and Hispanic or Latinx (6%) directors are still heavily underrepresented.
– There was little progress on age diversity. In 2021, as in recent years, two-thirds of seats were filled by people between ages 50 and 65. The average age of new appointees was 57.
The report provides more granular data concerning board composition and concludes with some thoughts on the actions being taken by “best in class” boards when it comes to board composition and succession. These include actively seeking new directors whose backgrounds combine a mix of traditional expertise with knowledge that is newer on boards’ skills matrix (such as sustainability or cybersecurity), bringing younger directors onto boards, staying tightly focused on racial, ethnic and gender diversity, and seeking new members who can assume a leadership role.
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– John Jenkins