When it comes to how diverse corporate boards are today and where the trend is going, the numbers are either heartening or discouraging – depending on your viewpoint.

The proportion of women grew from 19 percent in 2015 to 31 percent in 2022, according to recruiting firm Heidrick & Struggles’ “Board Monitor US 2023.” However, that progress has slowed in recent years and has accrued mostly to the benefit of white women.

The proportion of Black directors has nearly doubled since 2015, to 17 percent in 2022. A surge of enthusiasm prompted by the Black Lives Matter movement had increased that percentage to 28 percent in 2020, but it has waned since then.

Looking forward, Heidrick & Struggles’ report points out that its analysis of executive teams at Fortune 100 firms shows only about 20 percent women and 20 percent racial and ethnic minorities in the pipeline of CFOs, COOs, and division heads.

The lack of balance is global. Deloitte Global Boardroom Program’s most recent “Women in the Boardroom” report found that women hold 23.2 percent of the world’s board seats and only 8.4 percent of chairmanships. At the current pace, female chairs will reach parity in 2073.

Although recent trends are encouraging, overall progress toward boards that represent the population is slow, hindered by a slew of factors. These include the not-so-robust pipeline of new candidates; political backlash against diversity, equity and inclusion (DEI); unconscious biases; and the fact that many board seats continue to be filled by word-of-mouth from current board members drawing on their own non-diverse networks.

Countervailing efforts come from studies that show diversity is correlated with corporate performance, and from shareholders, employees, and rating agencies that are demanding broader representation in the ranks of those who run powerful companies and organizations. While the focus of board diversity efforts began with women, it has shifted to the need for diversity that spans ethnicity, age, sexual orientation, geography, and types of expertise.

“We should do our darndest to emulate the population at large … up and down, throughout the organization,” says Roberta Sydney, HBS alumna, who has sat on nearly a dozen boards. “When you have a homogenous group, you tend to have group think.”

More diversity in new directors

One encouraging trend is that new board directors are more diverse than the old guard. The 2023 U.S. Spencer Stewart Board Index found that 67 percent of new directors were female, LGTBQ+, or from an underrepresented racial/ethnic minority group. Recruiting firm Korn Ferry, which places about 1,500 directors a year, has found that about 70 percent of placements in recent years have been someone who brings a historically-underrepresented identity to the table.

The #MeToo movement contributed to this trend, as did the Black Lives Matter movement, and the wave of accelerated retirements among older board members during the COVID-19 pandemic, said Tierney Remick, vice chairman and co-leader of Korn Ferry’s Global Board and CEO Practice. This is occurring while U.S. demographics shift increasingly toward majority-minority, with the non-Hispanic white population declining.

Larger trends of polarization have driven some backlash in the United States against DEI efforts, especially after the 2022 Supreme Court decision eliminating affirmative action in admissions.

Some, like Larry Cabaldon, CEO and founder of Boardroom Performance Group in Irvine, California, worry that the debate over diversity is a distraction from boards’ responsibility to protect shareholder value. However, diversity advocates say the debate encourages companies to be more thoughtful about how they source candidates, because they know their selection process is under scrutiny.

“How do you know you're hiring the right person if you're seeing only a small slice of the qualified candidates who are out there?” said Colleen Ammerman, director of the Race, Gender & Equity Initiative at Harvard Business School. “If your network is homogenous … you’re selecting from a pretty narrow pool.”

Entry Points on Private Boards and Smaller Firms

While many of the seats at start-ups are reserved for big investors, some private boards can provide an entry point for executives looking to branch into board membership. Furthermore, there are many more privately-held than publicly-listed companies.

Remick says the trend toward more diversity on private boards is “on fire, up several 100 percent over the last five, six years.”

Smaller firms can also offer openings for underrepresented board candidates. In the past 10 years, the percentage of female directors in Fortune 500 firms has gone up about 10 percentage points, to 33 percent. The representation of women is lower in the Russell 2000 Index (the smallest 2,000 stocks in the Russell Index), at about 28 percent. But the proportional rise has been greater, with a jump of 11 percentage points.

Companies also are casting a broader net for the functional experience they seek for board candidates, including moving beyond mostly CEOs and COOs to bring in C-suite leaders from information technology and human resources, functions which tend to have more gender and racial diversity in their leadership ranks.

Key advice, training from networking groups

In this context, networking groups have proliferated to help first-timers and others find board seats. Some groups are focused on helping women or particular demographic groups, while others are more general. They offer advice on finding spots, networking opportunities, and training to help potential board members hit the ground running.

It’s vital that diverse voices not only secure board seats, but also to have a chance to be effective, said Cynthia Soledad, global head of Egon Zehnder’s diversity, equity and inclusion practice and a partner in the business management consultancy. That goal requires adequate onboarding and mentorship, along with supportive attention from board chairs who ensure that the agenda gives newcomers a chance to contribute their expertise.

Soledad compared the experience with “being the new kid in the class and the teacher ensuring they call on you on something on which you will show up well, right in those early days of class, so you establish your voice in the room.”

Source of Hope from Within Companies

One of the biggest hopes that advocates see for more diversity comes from within companies themselves.

Soledad says in her search work for companies, she rarely has them ask “why” they should press for diversity on boards. “People understand why. It's now a ‘how?’ How do we tap into the right talent? How do we make the best use of that talent? … how should we be thinking differently and addressing our own biases?”

Remick believes that while the public debate about diversity may be loud, it hasn’t diminished corporate efforts to achieve greater representation on boards. “They’re leaning in because it’s good for business.”