In Historic First, Minority Directors Now Hold 20 Percent of U.S. Corporate Board Seats

ICS Analysis Shows Black Directors Driving Growth

ROCKVILLE, Md. (February 21, 2023) – ISS Corporate Solutions, Inc. (ICS), a leading provider of compensation, governance, and sustainability SaaS and advisory services to help companies improve shareholder value and reduce risk, today announced the results of an analysis of the largest 3,000 U.S. companies which shows racial and ethnic minorities for the first time comprise 20 percent of all board directorships.

The ICS analysis, which covers a four-year period from January 1, 2019, through January 1, 2023, shows that of the racial and ethnic minority groups analyzed, each saw growth in the proportion of directorships members of those groups hold. Asian directors saw a 55 percent increase in directorships during the period studied while the number of directorships held by Hispanic/Latin American individuals grew by 37 percent. Directorships held by Middle Eastern/North African individuals jumped by 38 percent, while those directorships filled by Native American/Alaskan Native/Native Hawaiian individuals grew by 33 percent. Conversely, the proportion of directorships held by Caucasian directors fell by 9 percent, and now comprises approximately 79.9 percent of all directorships at companies covered in the analysis.

Among minority groups, directorships filled by Black individuals saw the most pronounced growth, increasing by 90 percent over the study period with 2190, or 8.3 percent, of all board seats now held by Black directors.

“Though their proportional numbers remain behind those of the U.S. population as a whole, these figures nevertheless represent a watershed moment for minority corporate directors broadly and Black directors in particular,” said Marija Kramer, Head of ISS Corporate Solutions. “The analysis shows the impact of increasing and continual institutional investor engagement with portfolio companies on matters around board diversity coupled with growing stakeholder pressure from various quarters over the past two years.”

Black directors also saw notable gains in positions of influence over the direction and composition of boards. The proportion of Black lead directors more than doubled, for example, rising from 1.9 percent in 2019 to 4.7 percent as of January 1, while the proportion of Black nominating committee members also grew over the four-year period, jumping from 5.4 percent to 9.9 percent. The proportion of Black nominating committee chairs also increased modestly from 5.8 percent to 6.2 percent. The number of Black CEOs grew from 18 to 28 during the period of study; however, the proportion of Black chairs declined from 1.3 to 1 percent.

Significant increases in directorships held by Black individuals evidenced at the top 3,000 U.S. companies starting in 2019 carried through all sectors apart from Utilities, which previously had the highest proportion and remains tops in Black representation at 12 percent. The Energy and Real Estate sectors saw the largest increases in the proportion of Black directors during the period covered, growing by 192 percent and 153 percent, respectively. However, the Energy sector had the lowest level of directorships held by Black individuals in 2019, accounting for much of the large increase.