SAN FRANCISCO (KCBS RADIO) – Corporations have a lot of power in the U.S. and in other capitalist societies. Does the makeup of people running those corporations look like the general population?
Based on data from recent reports, no.
According to one analysis from data and technology company Equilar of its own index of 500 companies and the Russell 3000 index of the largest U.S.-traded stocks, less than 50% of board directors of large companies are either women or ethnically diverse. Per recent U.S. Census Bureau data, women make up more than 50% of the U.S. population and a little over 76% of the population identifies as white.
“At the end of 2021, 44.6% of board seats in the Equilar 500 were composed of diverse directors compared to 36.1% of Russell 3000 board seats,” said Equilar.
By the fourth quarter of the year Black and African American identified persons made up 6.02% of board directors, compared to 13.4% of the U.S. population that identifies as Black or African American. While Hispanic and Latino identified people make up more than 18% of the U.S. population, they only accounted for 2.7% of board directors, according to the Equilar analysis.
Diversity on corporate boards matters because, as the University of Sheffield in England said, “corporations sit at the heart of contemporary capitalism…command vast resources, govern entire swaths of our economy, and wield immense political power.”
Although board diversity has not caught up to the U.S. population, another study from executive research company Heidrick & Struggles found that representation is improving.
“Boards have continued a trend that began in the second half of 2020: bringing in an infusion of fresh thinking by reaching out to groups of people from increasingly more diverse backgrounds,” said the company. “The changes of 2021 were mostly incremental but generally positive.”
Heidrick & Struggles noted that factors such as the COVID-19 pandemic, racial and social justice movements, increased polarization, climate change, and the Russian invasion of Ukraine have impacted corporate boards in recent years.
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