NEW YORK, NY - October 19, 2020 - The vast majority of corporate boards are committed to increasing diversity with 81 percent either having a diversity plan in place or intending to create one, according to a survey released today by Diligent Corporation, a pioneer in modern governance, and the New York Stock Exchange.
The survey found that 54 percent of corporate boards have a diversity plan in place and 27 percent intend to create such a plan. Impossible Until It's Done: Corporate Board Diversity and Refreshment Practices is drawn from the survey responses of 251 U.S. corporate directors and executives who attended two board diversity webinars co-hosted by the NYSE and Diligent in August and September 2020.
'What we're finding is that corporate boards are starting to rethink the way they recruit and appoint new directors in order to better reflect their employees and customers, but the strategies they are using are not accelerating change as fast as they would like,' said Brian Stafford, CEO of Diligent. 'Companies not only want to meet the current moment, but also understand diversity makes smart business-sense. Diverse leaders bring new ideas, fresh perspectives, and the outside-the-box thinking required to succeed in this time of uncertainty and rapid change.'
'Diversity is a critical issue for corporate boards, and many companies in our NYSE community have placed a high priority on developing and executing strategies to strengthen diversity in the boardroom,' said Stacey Cunningham, President of the NYSE. 'Our NYSE Board Advisory Council, which has brought together 21 CEOs of major public companies to source CEO-sponsored, diverse board-ready candidates for our network, underscores the commitment of corporate leaders to this cause. While there is certainly more work to be done, we are making important progress.'
Among companies that are taking steps to refresh their boards, creating the opportunity for diverse candidates to join, the survey found the most widely adopted approaches are:
- 17 percent have limited the number of boards on which a director may serve
- 14 percent have implemented board member age limits
- 11 percent have added board seats
Other board refreshment strategies known to be effective were less widely embraced:
- 8 percent have implemented limits on directors' terms of office or overall tenure
- 6 percent have asked long-tenured directors to retire or resign
- 4 percent have created diverse-only slates of candidates
- 3 percent have set diversity quotas
Looking ahead, respondents rated their companies' likelihood to implement various board refreshment strategies on a 5-point scale. Disclosing board diversity data led with a 3.78 rating. Other approaches included tenure or term limits at 2.32, asking long-tenured directors to resign or retire at 2.18 and diversity quotas at 2.03.
Regarding timing, 35 percent of boards hope to meet their diversity goals within 1 to 3 years, but 45 percent have no specific time frame.
The survey period spanned five weeks from mid-August through late September 2020 and garnered 475 responses, 251 of which were from corporate directors, top executives and other senior staff. Results were drawn from the group of 251 respondents, who had direct knowledge of their companies' approaches to board composition, diversity and refreshment practices.
The report can be downloaded at https://insights.diligent.com/board-diversity/nyse-board-diversity-report.
About Diligent Corporation
Diligent Corporation is the pioneer of modern governance, empowering leaders to serve their stakeholders and shareholders alike and organizations to turn governance into a competitive advantage. Diligent empowers every leader to be knowledgeable and confident in the way forward - leveraging unparalleled insights from a team of industry innovators, as well as highly secure, integrated SaaS technologies. Diligent Compliance is the first solution in its class to incorporate the World Economic Forums (WEF) International Business Councils (IBC's) globally recognized ESG metrics into the solution.
In 2020, Diligent launched Modern Leadership, an initiative in partnership with industry leading search firms, private equity firms, and its customers to increase representation of diverse talent at the board level. With support of its 19,000 customers and community of nearly 700,000 directors and leaders using its platform, Diligent is championing diversity and inclusion from the top.
About the New York Stock Exchange
At the New York Stock Exchange, we are driven every day to lead through innovation and are proud to be the exchange of choice for those who embrace new thinking and fresh ideas. We are Forever Forward.
Lack of diversity on corporate boards is a well-documented issue and the NYSE is making a proactive step toward progress. In May 2019, the NYSE Board Advisory Council launched to address the critical need for inclusive leadership by connecting diverse candidates with companies seeking new directors. The Council, which is comprised of 21 Member CEOs from some of the world's largest and most well-established brands, will leverage their own personal networks to identify talented candidates interested in serving on boards. Through an exclusive online network and series of live events, the Council will introduce candidates to NYSE-listed companies seeking to expand diversity on corporate boards.
Please visit the NYSE ESG Resource Center for more information.