The impression that women and minorities continue to be substantially underrepresented on corporate boards was confirmed with the release of the 2010 Alliance for Board Diversity Census (ABD). The ABD comprises five organizations—Catalyst, the Executive Leadership Council, the Hispanic Association on Corporate Responsibility, Leadership for Asian Pacifics, Inc., and the Prout Group, Inc.
Among Fortune 100 companies, the data compiled not only reflects stagnation in some areas, but also reveals decreases in the representation of certain minorities on corporate boards. For example, women gained 16 board seats between 2004 and 2010; however, their increase was only 1.1 percentage points. Further, during the same period, African American men lost 42 board seats while white men gained 32 seats. Overall, the number of boards with 30 percent or less representation of woman and minorities has increased from 59 to 65 among Fortune 100 companies in the past six years.
Unfortunately, the situation is worse when the group is expanded to include boards of Fortune 500 companies. 2010 was the first time Fortune 500 companies were included in the census and the ABD concluded that “Fortune 500 boards are less diverse than Fortune100 boards.” For example, approximately one-half of Fortune 500 company boards have 20 percent or less representation of women and minorities. In contrast, the census also highlighted companies with 40 percent or more seats held by women and minorities, including top-ranking Avon Products (63.6 percent), Target and PepsiCo (58.3 percent), Aetna (53.8 percent), and Staples (50 percent).
In the letter from the ABD accompanying the census, the ABD predicts that “[u]nless this troubling trend is reversed and U.S. companies begin to reflect their shareholders, markets, and employees, they will fail to reach maximum potential as leaders in the global economy.”
Keywords: diversity, minorities, board, corporate