A whopping 72% of new board members at S&P 500 companies come from underrepresented groups, according to an analysis from executive recruiting firm Spencer Stuart. However, overall board diversity has not increased by much due to low turnover.
Unsurprisingly, the demographic that has seen the most progress on boards are women, who make up 46% of new directors, up from 43% in 2021 and 26% in 2012. Today, 32% of all S&P 500 directors are women, compared to 30% last year and 22% in 2017, and the average board has three female directors. About 98% of boards have two or more women directors, up from 61% in 2012.
The share of new directors from underrepresented racial or ethnic groups is 46%, a slight dip from 2021’s 47%, but a marked improvement from 12% in 2012. Of the 46%, 26% are male and 20% are female. Though nearly all of the gains among people of color are attributable to an increase in Black directors, the total representation of Black board members actually stayed the same, at 11%.
The data demonstrates a continued effort from boards, albeit slow progress, as directors increasingly seek to match the demographics of their customer base. The report notes a sharp rise in diversity reporting from S&P 500 companies: More than 90% disclose their racial and ethnic composition, up from 60% last year. And half of S&P 500 companies report that they now require a diverse slate of candidates for all board appointments, up from 39% in 2021.
Although diverse representation among new board members is rising, Spencer Stuart points out that “persistent low boardroom turnover” has stunted progress on total representation. It should also be noted that other factors are driving board diversity forward, including the push for wider-ranging expertise—including HR, cybersecurity, marketing, and technology—and greater interest in directors who are not already on other boards.
Digging deeper into the data, even companies that have a more diverse board than their peers may want to look at their chairmen and committee chairs. Just 9% of independent board chairs come from underrepresented groups and representation in committee leadership roles has remained low.
Aman Kidwai
aman.kidwai@fortune.com
Headlines
Starbucks looks to the board. Starbucks' appointment of three-time CEO Howard Schultz came as a surprise. Now, it appears the search committee will again look inward for its next chief executive as Schultz’s successor is expected to be announced by the fall. The coffee giant’s CEO search so far has “alarmed some investors,” but possible contenders for the corner office role include current board members: Mary Dillon, former CEO of Ulta Beauty, and Ritch Allison, the former CEO of Dominos (For more, read my piece on why Starbucks’ CEO search will be tougher than expected.) Bloomberg
C-suite attrition. Almost 70% of executives surveyed by Deloitte say they are seriously considering quitting their jobs in the interest of their own well-being, a sentiment shared by only 57% of non-executive employees. These executives overwhelmingly say that the pandemic has negatively affected their health and that they care more about improving their well-being than advancing their careers. They also report struggling with the responsibility of maintaining their employees’ well-being. Fortune
FDA bans Juul. The FDA ruled Thursday morning that Juul must stop selling and marketing its products in the U.S. and remove them from store shelves. The federal agency said Juul Labs’ studies on potential health risks did not provide adequate data or evidence relating to the toxicity or potentially harmful chemical effects of using its e-cigarettes and vapes. Juul has been investigated in the past for marketing to teens. Yahoo Finance
Economic slowdown. Economic growth and production is slowing in Europe and the United States, as rising energy and food costs weaken demand for other goods and services. Inflation, the Russia-Ukraine conflict, and resource shortages are hitting many industries and sectors, with European countries particularly concerned about energy shortages. The signs of a coming recession are piling up; retail sales are falling, and home sales have declined for four straight months. WSJ
BOARD MOVEMENT
Boeing has elected David Gitlin, former president and COO of Collins Aerospace, to its board. Bobby Kotick, CEO of Activision Blizzard, was re-elected to the company's board of directors for another year. Wayne A.I. Frederick, the president of Howard University, has been tapped to join the board of Workday. Hall of Fame Resort and Entertainment Company has appointed Teri Flynn, former SVP of programming for ABC Sports and ESPN, to its board. Clothing brand Duluth Trading Company has appointed Susan Riley, former interim president and CEO at PJM Interconnection, to its board. Synovus Financial Corp. has added two new directors: John H. Irby, an attorney and managing partner at multiple commercial real estate firms, and Alexandra Villoch, CEO of the Baptist Health Foundation and a former media executive. Sunrise Senior Living has added Jeff Kuster, CEO of the resort chain Canyon Ranch to its board. Stephanie Lilak, chief people officer at Bumble, was appointed to the board of First Watch Restaurant Group. Beauty brand Madison Reed announced the board appointments of Michael Dubin, founder of Dollar Shave Club, and Stephanie Davis Michelman, global CMO of Benefit Cosmetics.
View from the C-Suite
Jo Ann Jenkins has led AARP since 2014 and is now steering the advocacy group for Americans over 50 through big social changes, including the return of many older Americans to the workforce.
In an interview with Fortune’s Phil Wahba, Jenkins discusses the pandemic’s effect on older Americans, her push to include ageism in corporate diversity efforts, and the need to de-stigmatize the ageing process.
Read the full story here.
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