A determined nominating committee, backed by the commitment of the full board, can succeed where others fail by taking these three steps: persistently looking beyond traditional pools of talent, astutely assessing for candidate readiness, and thoroughly preparing to defend nominees in terms of business and cultural fit with the entire board.
In 2015, Fortune 500 companies filled 399 vacant or newly created board seats with independent directors--the largest number of such appointments since we first began tracking them seven years ago. Despite this record number of appointments, women, Hispanics, African-Americans, and Asian/Asian-Americans made little headway in boardrooms:
* Women accounted for 29.8% of new directors in 2015, up only slightly from 29.2% in 2014. The percentage of new female directors had been increasing steadily each year from 18.0% in 2009. In fact, given the rate of improvement, we had projected that women would account for half of new directors for the first time in 2024. Given the most recent data, however, the soonest we anticipate women will reach parity with men in numbers of new directors is 2026.
* For the seventh consecutive year, the percentage of directors of Hispanic origin elected to Fortune 500 boards was sharply lower than the overall representation of Hispanics in the U.S. population. Only 16 of the incoming directors in 2015 were Hispanic--just 4.0% of the total. Over the past seven years, an average of 4.7% 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.
* African-Americans accounted for 9.3% of new directors in 2015, up from 8.3% in 2014. The percentage of new African-American directors has increased from 5.3% in 2009. African-Americans accounted for 12.4% of the U.S. population in 2014, up slightly from 12.3% in 2010.
* Asian and Asian-American directors accounted for 4.8% of board seats filled in 2015, down from 5.3% in 2014. Directors of Asian descent have accounted for an average of 5.2% of new appointments over the past seven years, with no trend up or down. Overall, people of Asian descent accounted for 5.3% of the U.S. population in 2014, up from 4.8% in 2010.
Despite a few hopeful signs, the sluggishness in these numbers persists. But the conclusion that should be drawn is not that worthy candidates are in short supply. Rather, it's that finding them requires persistence, focus, and genuine commitment to the goal of board diversity. Too often, boards simply give up too soon and fail to consider creative solutions. They begin by pursuing the same high-profile, well-known people--the same people who are already over-recruited and over-committed--and when that doesn't work out they quickly...