Board Monitor 2018: Appointments of women to boards hit record high

In 2017, Fortune 500 companies filled 358 vacant or newly created board seats with independent directors. Few leadership positions are more consequential: Fortune 500 boards oversee companies that together account for two-thirds of the US GDP, with $12.8 trillion in revenues, $1.0 trillion in profits, $21.6 trillion in market value, and 28.2 million employees worldwide. That is why for the ninth consecutive year we have captured the key attributes of new appointees—their demographics, experience, and functional roles, among other factors; mapped how those attributes flowed onto boards in each industry; and identified trends in their continuing evolution. Following are some of our key findings:

• A little more than 38%—137 board seats—went to women in 2017. This marks the highest proportion of women appointed to boards in the nine-year history of Board Monitor and is the biggest year-on-year increase we have ever recorded—a jump of more than 10 percentage points. While in 2016 women lost some ground and it appeared that they would not reach parity with male director appointments until 2027, now we project that women will first reach parity with men with the new class of directors in 2025.
• Despite the great increase in female appointments in 2017, progress for women remains incremental. The percentage of women on Fortune 500 boards rose only to 22.2%, up just 1.2 percentage points from the figure of 21% the previous year. Because the percentage of women overall on boards increased only slightly, it appears that most of these new female appointees were replacing women who had left their boards.
• In the aggregate in 2017, African-Americans, Hispanics, Asians, and Asian-Americans constituted about 23% of new board appointees, the highest proportion since the inception of Board Monitor, coming on the heels of the previous high of 22% in 2016.
• The share of new board appointments that went to African-Americans rose from 9% in 2016 to 11% in 2017, the largest increase ever.
• The share of new board appointments that went to Hispanics remained at 6%, the high it first reached in 2016.
• The share of new board appointments that went to Asians and Asian-Americans remained at 6%, the same as in 2016.
• One Native American was appointed in 2017, the first in the nine-year history of Board Monitor.
• Almost 36% of new board appointees in 2017 had no previous board experience, up from 25% without any in 2016.
• The percentage of seats held by newly appointed directors overall has generally been trending upward, with 7.5% newly appointed directors in 2017.
• Current and former CEOs accounted for 47% of director appointments in 2017, down from 50% in 2016, 54.4% in 2015, and well below the high of nearly 55% in 2013, suggesting that boards are beginning to look beyond their traditional first choice of CEOs to fill vacant seats.
• Some 72% of newly appointed directors in 2017 had international experience, an increase of 11 percentage points over the previous year.
• As in the previous two years, financial services know-how was the most widely distributed career experience among newly appointed directors, representing almost 24% of their collective mix of career experiences.