Corporate Board Diversity

Companies understand that diverse boards can improve decision-making and enhance stakeholder involvement and can create more innovative workplaces. However, many companies are still struggling to make diversity a reality in their boardrooms. A swarm of forces have been pushing boards toward greater diversity. These include protests and activism by women and people of color, such as the Black Lives Matter movement; pressure from shareholders and other market players; and state legislation.

But despite these gains the composition of boards is still not up to par with the total population in the United States. According to an earlier Spencer Stuart study, white people still hold 84 per cent of the Fortune 500 board seats. Furthermore, the number of Data Room Providers minorities, ethnic or racial, women and other minorities on board has not increased substantially over the past five years.

Certain institutions are increasing the pressure they place on boards to adopt policies that promote diversity. CalPERS, the $330 billion pension fund that represents California public employees, recently sent letters to 504 companies included in the Russell 3000 Index with low levels of gender diversity on their boards.

To increase diversity in the boardroom, companies need to expand their search pools beyond the traditional networks of executive colleagues and recruit consultants from outside to search for new candidates. They must also eliminate selection criteria and procedures that have hindered board diversification in the past and create new best practices. They should also think about formal onboarding programs to help diverse directors get acclimated to the board's culture and workings.