Detroit Regional Chamber > Uncategorized > Report Finds A Continued Lack of Diversity on Boards of Fortune 500 Companies

Report Finds A Continued Lack of Diversity on Boards of Fortune 500 Companies

August 4, 2022

Biz Women
Marie Leech

Aug. 3, 2022

Just 31% of board members at Fortune 500 companies are female, and that number drops to a staggering 7% for non-white women, new research shows.

Of 5,403 board members, 69% are male, and 78.5% are white. The lack of gender and ethnic diversity among these corporate board members is the basis for the new “Build Better Boards” campaign, launched this week by Mogul, a female, minority-owned business and one of the world’s largest recruiting platforms for diverse executives.

Mogul’s Board Diversity in 2022 report found that 16 companies within the Fortune 500 have no ethnic minorities on their boards; three have no females or minorities; and none of the boards have Native Americans on them, male or female.

Even though women’s participation in the workforce is above 50%, just 31% of board members are female.

“To date, there are not 100 diverse boards within the Fortune 500, which highlights how much work needs to be done,” said Tiffany Pham, founder, chief executive officer, and chairman of the board at Mogul. Mogul’s executive recruitment division publishes diversity-focused “Top 100” lists on a quarterly basis, she said.

“That led us to our current research and some surprising insights about leading companies, many of which need to find more diverse executives including women, persons of color, veterans, and people with a disability to serve on their boards,” Pham said.

report released earlier this year by executive search firm Heidrick & Struggles found that Fortune 500 boards appointed a record number of women in 2021. That report found that 45% of the 449 board seats filled last year were women directors, up from 41% the previous year.

Even so, that report found that women – especially non-white women – were still grossly underrepresented.

According to The Harvard Law School Forum on Corporate Governance, the average tenure of a board member is 9.7 years.

“At our current rate, it will take at least five decades to reach ethnic parity on boards,” Pham said. “Someone graduating university today will be 73 years old when we reach parity.”

According to the Mogul report, retail and professional services have the highest gender diversity (35%) and telecommunication and packaging have the lowest gender diversity (23%). The energy industry has no gender and ethnic diversity, the report found.

The Build Better Boards campaign is a way to reach candidates and boards simultaneously, as Mogul offers diversity-focused executive and board recruitment services, according to the company’s website. Longtime clients include Fortune 1000 companies such as Anheuser-Busch (NYSE: BUD); The Hershey Company (NYSE: HSY); Nike (NYSE: NKE); and United Healthcare (NYSE: UNH).

“Corporate America is under pressure to improve its diversity,” Mogul’s report states. “Increasingly, companies are expected to better represent their stakeholders, workforce and communities. The business results are clear for those that do so – having a board of diverse directors correlates with increased business results.”

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