The Conference Board and ESGAUGE have published a new report, Corporate Board Practices in the Russell 3000 and S&P 500: 2020 Edition, which focuses on how companies can improve diversity and strategic capabilities in the boardroom. The Report finds that women on Russell 3000 boards have increased by just 4.2 percent over 3 years, and over 13 percent of the companies in the index still had no female directors. Moreover, only about 10 percent of S&P 500 companies explicitly report the race and ethnicity of their individual directors and 8 out of 10 of the directors at those companies are white. The study was published by The Conference Board and ESG data analytics firm ESGAUGE, in collaboration with Debevoise & Plimpton, the KPMG Board Leadership Center, Russell Reynolds Associates, and the John L. Weinberg Center for Corporate Governance at the University of Delaware.
Ann Mulé, Associate Director of the Weinberg Center, noted “The scrutiny of board diversity practices will continue to intensify, driven by multiple factors. As just one example, more and more institutional investors are following the lead of prominent asset managers that are moving diversity to the front and center of their corporate stewardship initiatives. Corporate boards are now at an inflection point and have a window of opportunity to embrace changes in their composition and practices that align with companies’ strategies and meet new investor demands. “
Additional key findings of the report include:
- Less than 5 percent of board chairs are women.
- Companies are looking beyond the C-suite for new directors.
- The most popular specialized skill sets are finance and information technology.
- U.S. board members serve longer than some of their foreign counterparts.
- Boards are not getting any younger (or older, for that matter).
- More than half of the companies in the Russell 3000 index do not restrict the number of additional directorships their board members can accept.
- A plurality of companies made no changes to the composition of their board of directors.
- Almost half of Russell 3000 companies have not yet transitioned to majority voting in director elections.
The report is complemented by an online dashboard, where users can manipulate and visualize the data across indices, sectors and company size groups.