Insights
Heidrick & Struggles Report: Mapping Incoming Boardroom Talent
Fortune 500 companies filled nearly 400 vacant or newly created board seats with independent directors last year—the largest number of such appointments since the inception of the Board Monitor seven years ago. Research conducted by Heidrick & Struggles highlights the persistent underrepresentation of Hispanic directors appointed to boardrooms within the Fortune 500.
- Hispanics accounted for just 4% of new directors named to Fortune 500 Boards in 2015 - versus 17% in overall U.S. population. The gap of underrepresentation has widened over past seven years.
- Pipeline remains a critical issue: Fewer than 2% of CEOs in Fortune 500 today are Hispanic.
- Heidrick & Struggles 2016 Board Monitor also indicates progress slowed for women in the boardroom; African-American director appointments increased but they remain underrepresented.
For the seventh consecutive year, the percent of directors of Hispanic origin elected to Fortune 500 boards was sharply lower than the overall representation of Hispanics in the U.S. population. Of 399 new directors appointed by Fortune 500 companies in 2015, only 16 were Hispanic—just 4.0 percent. Over the past seven years, an average of 4.7 percent of new directors have been Hispanic and there has been no discernible upward trend. As the Hispanic share of the U.S. population has grown during those years, the gap of underrepresentation in the boardroom has widened.
The share of new board appointments for Hispanics remained flat for the seventh consecutive year; the notable progress for women in recent years stalled; African-Americans edged up slightly, and the share for Asians and Asian-Americans fell slightly.
In addition to the upsurge in appointments, their study found:
- The total number of board seats shrank 6.0% from 2014 to 2015.
- The board-turnover rate increased to 8.5% in 2015, from 6.8% in 2014.
- Current and former CEOs and CFOs together represented the highest share of new board appointments—73.2%—since we began tracking the number in 2009.
- The percentage of new directors with international experience jumped to 66.7% in 2015, up from only 34.5% the previous year.
- Each appointee had substantial experience in 1.5 industries, on average, down from 2.2 in 2014.
Heidrick & Struggles 2016 Board Monitor also showed that the percentages of female director appointments has plateaued. African-Americans continue to be underrepresented in the boardroom as well. Other findings from the 2016 Board Monitor include:
- Women accounted for 29.8 percent of new directors in 2015, up only slightly from 29.2 percent in 2014. The percentage of new female directors had been increasing steadily each year from 18.0 percent in 2009. Last year, Heidrick & Struggles projected that women would account for 50 percent of new directors for the first time in 2024—but with the most recent data, the firm now projects that women will not reach parity with men in numbers of new directors until 2026.
- African-Americans accounted for 9.3 percent of new directors in 2015, up from 8.3 percent in 2014. The percentage of African-American new directors has increased from 5.3 percent in 2009. African-Americans accounted for 12.4 percent of the U.S. population in 2014, up slightly from 12.3 percent in 2010.
- Asian and Asian-American directors accounted for 4.8 percent of board seats filled in 2015, down from 5.3 percent in 2014. Directors of Asian descent have accounted for an average of 5.2 percent of new appointments over the past seven years, with no trend up or down. Overall, people of Asian descent accounted for 5.3 percent of the U.S. population in 2014, up from 4.8 percent in 2010.
To read the full report, click here.