Only a few Black executives have been added to the S&P 500 boards from last year

A new analysis done by Spencer Stuart reveals that Blacks account for only 11% of new directors in the past year. While minority women remained at 10% in 2020.

In such a time as this where there has been much protests and talks against racial disparity and social injustice, it was discovered that only a few S&P 500 companies Black executives added to their boards. This new analysis not only shows that Blacks are accounted for 11% of new directors in the past year, but also a 13% representation in the same period a year ago.

 According to the Spencer Stuart 2020 S&P 500 Board Diversity Report, almost all the major 200 publicly traded companies have minority directors. Yet, the numbers cannot be compared to the majority, with people of color making up only about 20% of the total board members of those companies.

Spencer Stuart’s North American board practice leader Julie Hembrock Daum says the turnover is an awfully slow one. She added that “in any given year, there’s about 8% board seats that turn. This year, there were fewer than there were last year, so there are just fewer opportunities to bring new people into the boardroom. And think that has a lot to do with the slow change for both women and minorities.”

Further findings on the analysis showed that diversity can be encouraged and multiplied by diversity. Meaning that companies with more people of color in their boardrooms are more likely to create room for more diversity in the boardroom.

There’s been mixed reactions as regards the efforts corporations are making to advocate social justice and bridge racial wealth gaps. Based on the latest findings, questions have risen, questioning the possibility of prioritizing social justice is the boardrooms, where decisions are made still reflect poor diversity.

“I think people understand now that it’s important, and it’s not going to go away and all of us are going to be looking at companies and what they do at their boards and at their management.”

While the overall representation of minority in the boardroom tends to be awfully low, it still differs by the different sectors, she added. For example, “utilities, energy and real-estate are infrastructure-heavy businesses, with long capital investment cycles, and more business-to-business customers, which face lesser pressures of consumers who may value diversity and its resulting innovation benefits more,” said R. Paul Herman, CEO HIP Investor, a San Francisco-based firm that rates companies based in their ability to handle environmental, social and governance issues.