Diligent Research Reveals Massive Gaps in How Diversity is Defined and Represented on Corporate Boards Globally
Inaugural report finds that gender is the only common diversity characteristic on boards around the world; Race, ethnicity, age and LGBTQ+ representation fall woefully behind
New York, NY, September 12 - While progress has been made in driving gender diversity on corporate boards, there are still massive gaps in how diversity is defined and represented on boards around the world, according to Diligent, the global leader in modern governance providing SaaS solutions across governance, risk, compliance, audit and ESG. In fact, new research – revealed at the Modern Governance Summit today, September 12, 2022 – shows that boardroom diversity by race, ethnicity, age and LGBTQ+ representation lags significantly behind gender diversity globally.
The inaugural Board Diversity Gaps: The Global Modern Leadership Report is the first ever global analysis of several major dimensions of boardroom diversity including gender, race/ethnicity and nationality, skillset and LGBTQ+ representation. Produced by Diligent, in collaboration with 22 partnering organizations around the world, the report provides a first-of-its-kind holistic view into the progression of diversity and inclusion on public and private boards worldwide.
“Diversity has risen up the boardroom agenda as organizations face increasing pressure to better reflect the diversity of their customer bases and communities, but progress has been slow and there are still many gaps when it comes to reporting on race, ethnicity and LGBTQ+ representation on boards,” said Lisa Edwards, President and COO of Diligent and board director at Colgate-Palmolive. “This report provides new, critical insights into how boardrooms worldwide are progressing against diversity goals and where there is still much work to be done.”
Among the top findings of the Modern Leadership Report:
- Diversity by directors’ nationality, race and ethnicity lags gender diversity globally, with the majority of analyzed countries not disclosing the ethnicity of each of the directors on the board. The percentage of S&P 500 directors from underrepresented racial/ethnic groups is only 22% and has not increased since 2021. Meanwhile, the percentages for Fortune 100 and 500 boards are 17.5% and 20.6% respectively as of 2020, and 24% for the Russell 3000 as of June 2022.
- Director appointments are far from gender parity. Only 36% of director appointments through May 2022 were female, on pace with the average for all of 2021. Female directors currently hold approximately 27% of public company board seats, up from 26% in 2021 and a four percentage point increase from 2019.
- Female directors trend younger than their male counterparts and have shorter tenures. The average age of female directors is roughly four years younger than their male counterparts, at 60 and 63.5 respectively. Female directors also have shorter tenures than their male counterparts at 4.7 years compared with 7.6.
- The issue of LGBTQ+ representation significantly lags behind other elements of boardroom diversity, with the U.S. being the only region analyzed that provides this data. Members of the LGBTQ+ community hold only 0.5% of board seats in the Fortune 500.
- New expertise types are being added to the boardroom, with 35% of newly appointed board directors bringing skillset backgrounds in areas like technology, marketing, sales, HR, ESG and legal in 2022.
- All-Male Boards Persist for Private Companies. In a review of 228 private growth-stage companies, Diligent found 58% have all-male-boards, compared with only 6% of publicly traded companies. Women hold approximately 11% of board seats on these private companies compared to 27% in public companies.
“The global picture of boardroom diversity today is varied and full of gaps, but what’s overwhelmingly clear is that gender diversity is the primary focus for boards around the world. Board diversity regarding race, ethnicity, age and LGBTQ+ representation fall woefully behind,” said Dottie Schindlinger, Executive Director of the Diligent Institute. “By better understanding the state of boardroom diversity across the globe, we’re able to increase the odds that corporate leadership opportunities will be made available to underrepresented groups.”
Like many organizations in recent years, Diligent has made concerted efforts to better understand and advocate for boardroom diversity. In 2020 Diligent launched Modern Leadership, an initiative to provide boards and senior leaders with the research, insights, partnerships and technology they need to further catalyze diversity in their organizations. This includes the Diligent Director Network — the largest and most diverse community of board-ready executives globally.
Read the full report here: https://www.diligent.com/board-diversity-gaps/
About the Report
The Modern Leadership Report is authored by Diligent Institute, the research arm and think tank of Diligent. Using a combination of quantitative data from company filings, surveys of corporate board members, practitioner insights and director interview, the report aims to provide a more holistic story about the progression of diversity and inclusion on public and private companies worldwide across the United States, Latin America, Europe, Asia and Australia.
The report includes contributions from twenty-two external partner organizations including the Alliance for Board Diversity (ABD), Ascend, Better Boards Initiative, BoardReady, The Center of Excellence for Sustainable Environment and Social Inclusion (COE-SESI), Corporate Board Member, California Partners Project, the Director Diversity Initiative at University of North Carolina, the ESADE Centre for Corporate Governance, European Women on Boards, Hawkamah, Human Resource Governance Leaders (HRGL), INCAE, the Institute of Directors in India, Institut Luxembourgeois des Administrateurs (ILA), the Latino Corporate Directors Association (LCDA), Out Leadership and the OutQUORUM Initiative for LGBTQ+ Board Diversity, Spencer Stuart, the University of Lagos, WTW and Women Business Collaborative. Diligent ESG business unit also partnered on the report providing data and commentary to the report.
Diligent is the global leader in modern governance, providing SaaS solutions across governance, risk, compliance, audit and ESG. Serving more than 1 million users from over 25,000 customers around the world, we empower transformational leaders with software, insights and confidence to drive greater impact and lead with purpose. Learn more at diligent.com.