Board Monitor US 2019: What’s changed in 10 years, what hasn’t, and what’s next
Boards & Governance

Board Monitor US 2019: What’s changed in 10 years, what hasn’t, and what’s next

Board diversity is at an all-time high—but there’s a long way to go. In this 10th anniversary Board Monitor report, we examine decade-long trends in board appointments and explore the potential for increased diversity over the next 10 years.
Heidrick & Struggles
Board Monitor US 2019

Over the past decade, the percentage of new director appointments to Fortune 500 boards that went to women more than doubled. Yet the percentage of women overall on those boards has remained stubbornly low. In 2009, the first year that Heidrick & Struggles tracked the key attributes of new directors, 18% of appointments went to women. Last year, the figure was 40%. Nevertheless, the total share of seats held by women on Fortune 500 boards in 2018 was still only 22.5%.1

While we have rarely encountered outright resistance to appointing women or minorities in past years, many boards did not make it a priority. Says Kathleen Cooper, chairman of the Williams Companies, a Tulsa-based energy company, “I have been surprised and disappointed that there hasn’t been more push to get more parity, to get diversity of thought, and to get women and minorities on boards more quickly.” Cynthia Jamison, chairman of Tractor Supply, the largest retail farm and ranch store chain in the United States, adds that increasing diversity on boards is “a problem not of supply, but of demand.”

In specific categories of racial and ethnic diversity, meanwhile, the story has been one of fitful demand and, in some cases, a perceived problem of supply. In 2018, the proportion of new board appointments that went to African-Americans, Hispanics, Asians, and Asian-Americans combined matched the all-time high of 23% first achieved the previous year. However, much of the rise is attributable to the proportion of African-American appointees nearly doubling over the past decade. The share of new board appointments that went to Hispanics has remained between 4% and 6%, showing little progress. For Asians and Asian-Americans, the picture is only slightly brighter, with 8% of new appointments in 2018, matching a high first reached in 2011.

As these trends suggest, the story of increasing diversity on boards is far from simple and far from over. Based on 10 years’ worth of data and our extensive experience working with boards around the world, we see real but still disappointing progress—and some straightforward ways to speed things up.

The surge in appointments of women

The greatest gains in appointments of women came in the past two years: in 2017, the proportion of female appointees spiked 11 percentage points, to 38%—the biggest year-on-year increase ever. In 2018, the figure rose even further, to 40%, with 183 of the 462 appointments going to women.

What drove this recent surge? We see a confluence of three factors. First, more boards now make diversity a priority. Recently, we have encountered more boards that make it clear from the outset of a search that they do not want to merely see a diverse slate of candidates—on many measures of diversity—but that they intend to appoint a diverse candidate. Second, boards feel themselves increasingly being held accountable for their performance on diversity through initiatives such as a new law in California mandating female directors at public companies and more and more public efforts by watchdog groups and investors to “name and shame.” Directors we speak with also tell us that they are feeling the pressure from customers and the rising generation of employees as well. Third, and perhaps less demonstrably, the increased urgency in 2018 may also owe something to the #MeToo movement.

And, of course, these factors are supported by the now strong evidence of the benefits of diversity, not only in terms of business performance but also in terms of corporate reputation at a time when reputation is more important—and more fragile—than ever. Says Cressida Hogg, who succeeded Alison Carnwath as chairman of Landsec, the largest commercial-property development and investment company in the United Kingdom, “Our having two consecutive female chairs has had great impact externally, and many women have shared their appreciation of that fact with me.”

Even so, our analysis suggests that women will still not reach parity with men in board appointments until 2023. Reaching a representative level of racial and ethnic diversity in appointments, where progress has been slower and pressure less focused, will likely take far longer.

Accelerating progress toward diversity

The good news is that there is a plentiful supply of board-ready candidates who are women and/or from racial or ethnic minorities. The key to finding them is looking beyond the default preference for CEO experience. In 2018, the proportion of current or former CEOs appointed to boards reached an all-time high of 60%, so it’s clear that companies aren’t consistently casting their nets widely.

But while CEOs certainly bring valuable skills to the table, many outstanding general managers and divisional heads have just as much expertise in skills such as strategic orientation, operational ability, and P&L experience. Presidents of universities, retired public servants who have led large government agencies, and retired career military officers also bring valuable experience leading complex organizations. Well-run private companies can also be a source of diverse talent. In addition, diligent searching can identify younger executives on the fast track to the top. As a group, they’re generally more diverse than executives in the past, and they will furnish many of tomorrow’s CEOs.

The female chairmen and independent directors we talked with agree that boards can achieve greater diversity, with no sacrifice in quality, by casting a wider net. “Boards just need to accept candidates from less traditional roles and functions,” says Tractor Supply’s Jamison. Elaine Rosen, chair of New York–based Assurant, a global provider of risk-management products and services, says, “You have to push for diversity in its broadest sense.”

There is somewhat less agreement on mechanisms such as quotas to ensure progress. Says Cooper, chair of Williams Companies, “I don’t like quotas, but I do think the ‘Rooney Rule’—the National Football League’s requirement that teams interview diverse candidates for coaching and front-office jobs—could be a good way to go.” Jane Shaw, former chairman of Intel, points to the “30% Club,” originated in the United Kingdom by a group of business leaders who are committed to persuading FTSE 100 companies to achieve at least 30% female representation on their boards. “CEOs who have more women on their boards probably have more women in management and know the value of diversity,” she says. “They are confident enough to handle different leadership styles, orchestrate productive discussions, and achieve the best outcome for the company.”

May Tan, former CEO of Standard Chartered (Hong Kong), a former member of the Listing Committee of the Stock Exchange of Hong Kong, and currently on the boards of Link Asset Management and MSIG Insurance HK, offers a novel suggestion for moving the needle on diversity: “Stock exchanges could make it mandatory for companies conducting an IPO to have at least 20% female representation on their boards in order to get listed and 30% within three years.”

Looking ahead

“People want to see more women at the top,” says Hogg, “and shareholders are unprejudiced—they just want results.” The undeniable connection between diversity, in terms of not just gender but also race and ethnicity, and business performance is one significant spur. The reputational benefits of increasing all kinds of diversity will also encourage those companies that are still part of what Jamison identified as the “demand problem.” Finally, this may have been a notably turbulent decade, but the pace of change and number of surprises are unlikely to slow, so boards will increasingly need the resilience and effectiveness that some are gaining by seeking new directors with a broader range of experience in terms of cultural and industry backgrounds. Says Elizabeth Tallett, chairman of health insurer Anthem, “Success breeds success—more women on boards equals more women executives.”

Casting a wider net will make a huge difference. In addition, we have found that diversity can’t be the purview of a lone director: Unless the chairman, joined by other influential directors, makes it a priority, good intentions rarely turn into action. Finally, boards will benefit from long-term succession planning, which includes thinking creatively about their most strategic needs, building relationships with potential candidates over time, and even increasing the size of the board to ensure long-term diversity by being able to add people when they are available. Board Monitor has tracked these changes over the past decade, and we hope to report an even higher trajectory of increase in diversity of all kinds in the next decade.

The bottom line? Says Marjorie Magner, chairman of Accenture and former chairman of the Gannett Company, “You have to be gently unrelenting.”

Thanks to the following Heidrick & Struggles colleagues for their contributions to this article: Matt Aiello, Lisa Baird, Sam Carey, Chantal Clavier, Bonnie Gwin, Lee Hanson, David Hui, Mary MacDonald, Julia Penrose, Dave Pruner, Victoria Reese, Sandrine Roseberg, Sara Spiering, and John Thompson.


1 Deloitte and Alliance for Board Diversity, Missing Pieces Report: The 2018 Board Diversity Census of Women and Minorities on Fortune 500 Boards, 2019.

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