Study: Corporate Boards Are More Diverse Than Ever, But Growth in Racial Diversity Among New Directors Is Slowing

Corporate America's boards are more diverse than ever. But racial diversity has recently undergone a marked slowdown. From 2022 to 2024, the share of new Russell 3000 directors who are non-White dropped from 48% to 31%. Moreover, the share of new directors who are Black fell from 26% to 12%.

When it comes to gender diversity, there’s a complex picture: While women hold a record level of overall board seats (29%), they hold just 8% of board chair positions.

These findings and others come from a new report by The Conference Board, ESGAUGE, KPMG, Russell Reynolds Associates, and The John L. Weinberg Center for Corporate Governance at the University of Delaware. In addition to providing the latest data and insights on racial and gender diversity, the study also analyzes board skills, qualifications, and evaluations.

Highlights include:

Diversity

Data on the new class of directors only reflect those appointed in 2024—not the entire board.

Racial representation dropped significantly in the 2024 Russell 3000 new class of directors:

• Non-White directors: From 2022 to 2024, the share of new non-White directors fell from 48% to 31%. This slowdown may reflect progress toward demographic balance and ongoing gaps in representation.
• Building the pipeline: “Research consistently shows that boards with a diversity of skills, backgrounds and demographics are more effective. Ensuring a pipeline of diverse talent is not just about representation, it’s also crucial for effective board oversight and decision making. Boards can take practical steps to optimize board recruitment by seeking director candidate pools that include diverse leaders, and by advocating for programs that develop high-potential diverse leaders for future board service," said Annalisa Barrett, Senior Advisor, KPMG Board Leadership Center.

Despite less diversity in the 2024 incoming class, overall racial representation is at an all-time high:

• Non-White directors: From 2020 to 2024, the share of non-White directors increased from 20% to 26% in the S&P 500. It increased modestly in the Russell 3000, from 21% to 23%.

Women hold about a third of board seats overall, but only about one in ten board chair seats:

• Women directors: From 2020 to 2024, the share of women directors increased from 27% to 34% in the S&P 500. It also grew from 21% to 29% in the Russell 3000.
• Board chair/leadership positions: Women hold 22% of lead director positions, and 11% of board chair positions in the S&P 500; and 17% of lead directors and 8% of board chairs in the Russell 3000.
• Advancing women in leadership roles: “The share of female directors is at record levels, and the growing presence of women on boards has expanded the pool of candidates with the expertise, tenure, and relationships required for leadership roles. At the same time, boards may want to consider reassessing and refining their diversity hiring strategies to ensure continued momentum” said Andrew Jones, coauthor of the report and Senior ESG Researcher at The Conference Board.

Qualifications and Skillsets

More Russell 3000 directors are coming from the C-Suite (non-CEOs) or below—a departure from the CEO-heavy trend:

• C-Suite executives: From 2020 to 2024, the share of active or former C-Suite executives (non-CEOs) increased from 14% to 18%.
• Below the C-Suite: The share of directors who sit below the C-Suite grew from 17% to 21%.
• Talent pools are expanding: “Sitting and former CEOs will always be in demand in the boardroom, but the trend this year in appointing non-CEOs, and more junior executives with deep expertise in certain areas, may indicate that boards are either trying to balance out the mix of expertise in the boardroom, or are trying to get ahead of emerging trends,” said Richard Fields, Head of the Board Effectiveness Practice at Russell Reynolds Associates.

As geopolitics intensifies and cybersecurity threats escalate, there’s growing demand for directors with experience in these areas:

• International experience: From 2020 to 2024, the share with international experience increased from 40% to 51% in the S&P 500. It also grew in the Russell 3000 from 22% to 29%.
• Cybersecurity: From 2020 to 2024, the share with cybersecurity experience grew from 13% to 25% in the S&P 500. It grew from 7% to 16% in the Russell 3000.

Overboarding

Corporate America is cracking down on overboarding:

• Overboarding policies: From 2020 to 2024, the adoption of overboarding policies grew from 68% to 81% in the S&P 500. It also grew in the Russell 3000, from 44% to 53%.
• Growing scrutiny: “The increase in overboarding policies reflects heightened investor engagement from certain institutional investors and pressure from both dominant proxy advisory firms,” said Lawrence A. Cunningham, Director of The John L. Weinberg Center for Corporate Governance at the University of Delaware.

Evaluation and Accountability

Amid heightened board scrutiny, performance evaluations and independent assessors are gaining momentum:

• Full board evaluations: From 2020 to 2024, the share of companies conducting full board, committee, and individual director evaluations increased from 43% to 55% in the S&P 500. The share grew from 24% to 38% in the Russell 3000.
• Independent assessment facilitators: From 2020 to 2024, the use of independent assessment facilitators increased from 21% to 37% in the S&P 500. It grew from 10% to 17% in the Russell 3000.
• More boards embrace external perspectives: "The move toward more comprehensive board evaluations marks a significant shift in governance practices. While most companies rely on in-house programs for director orientation and education, we're seeing a growing recognition that external perspectives can be valuable," said Umesh Tiwari, Executive Director of ESGAUGE. 

 Note: Findings are based on public disclosures by Russell 3000 and S&P 500 companies up to October 23, 2024.