Number of Black Director Appointments Grows Exponentially at Large U.S. Companies
ICS Analysis Shows Nearly Three-Fold Increase in Black Directors Among Those Newly Appointed Following Racial Justice Movements of 2020
ROCKVILLE, Md. (May 25, 2021) – ISS Corporate Solutions, Inc. (ICS), a leading provider of compensation, governance, and sustainability tools and advisory services to help companies improve shareholder value and reduce risk, today announced the release of an analysis showing a nearly 200 percent increase in the count of newly appointed S&P500 board members that are Black. The spike follows widespread racial justice protests last summer that, in turn, prompted many U.S. corporate leaders to pledge to increase the number of Black directors and executives within corporate ranks.
According to an ICS analysis covering the period from July 1, 2020, through May 19, 2021, 32 percent of all newly appointed directors were Black while just over one-half (54 percent) were White. By comparison, those figures stood at 11 and 74 percent, respectively, for the period running between July 1, 2019, and May 19, 2020, and at 12 and 77 percent, respectively, for the period between July 1, 2018, and May 19, 2019. Moreover, the total number of S&P500 companies appointing a Black director also grew exponentially, jumping from just 52 in the period stretching from July 1, 2019, to May 19, 2020, to 148 for the most recent one-year period.
The pace of change is most pronounced at larger companies. When examining the full Russell 3,000, just 22 percent of new board members appointed between July 1, 2020, and May 19, 2021, were Black while 59 percent were White.
“The needle has clearly moved,” said Marija Kramer, Head of ISS Corporate Solutions, “as companies respond to the chorus of investors and other stakeholders who since last summer have called for greater racial and ethnic diversity within corporate boardrooms.”
The analysis further shows an uptick in those who are new to board service. For the most recent period examined, 49 percent of newly appointed Black board members were new to publicly traded company board service compared with 36 percent and 33 percent over the two prior periods, respectively.
“It is particularly notable that the newest cohort of Black directors is more likely to be new to board service, compared with previous groups, and suggests the pipeline of minority director talent is growing at a faster rate than previously evidenced,” said Kramer.
Overall and as of May 19, 2021, Black directors make up 10.6 percent of S&P500 directorships compared with 8.3 percent as of May 19, 2020, and 7.8 percent as of May 19, 2019.