Hispanics Lag Farthest Behind in Corporate Board Appointments
By Elizabeth Olson, New York Times
Efforts to diversify America’s corporate boards with more minorities and women are still lagging, and Hispanics, in particular, are far behind other groups in being selected for directorships, according to an annual report (pdf) on the board composition of large companies.
Overall, 399 new directors were selected for the top company boards last year. Hispanics claimed only 4 percent of those appointments, or 16 seats. The gap has widened over the last seven years, according to Heidrick & Struggles Board Monitor, which has tracked board appointments since 2009.
“The percentage of Hispanics appointed to such boards has not improved in recent years, even as they comprise 17 percent of the overall U.S. population,” said Bonnie W. Gwin, a co-managing partner of the executive recruitment company’s global CEO and board practice.
That compares with increases in directorships for women and African-Americans, but a decline in the number of Asians and Asian-Americans picked to fill board positions.
Women made up 29.8 percent of the new directors named last year, up slightly from 29.2 percent in 2014, according to the board monitor, which tracks proxy filings, news releases and other corporate disclosures about board membership.
Even as the percentage of new female directors has been rising each year, from 18 percent in 2009, the board monitor said it had revised downward a projection that women would reach parity with men in the number of new directors by 2024. It now predicts that women will make up 50 percent of new directors by 2026.
African-Americans made modest strides, accounting last year for 9.3 percent of new directors, up from 8.3 percent in 2014. The percentage of African-Americans, who in 2014 made up 12.4 percent of the population in the United States, rose from 5.3 percent of new directors in 2009 to 10.3 percent in 2013, but it has since declined.
Asians and Asian-Americans also lost some ground, accounting for only 4.8 percent of board seats filled in 2015, according to the report. That was down from 5.3 percent in 2014. Generally, their appointments have stayed steady in recent years, closely paralleling the share of Asians in the population, which was 5.3 percent in 2014.
For minorities, the biggest obstacle to gaining entry to the boardroom is lack of operating or financial experience, Gwin said. Last year, 73.2 percent of newly appointed directors were current chief executives or chief financial officers, the report found. In addition, board seats do not turn over quickly. Last year, for example, only 8.5 percent of board seats changed hands.
And their replacements are not young. The average age of the new directors was 58, the same as the year before. Some attribute this to an innately conservative business culture; others point to networks of white men who connect through college, work and social activities and who feel more comfortable with people who look like them.
The absence of Hispanic board members appears to come, in large part, from the shortage of Hispanic chief executives, said Cid D. Wilson, president and chief executive of the Hispanic Association on Corporate Responsibility.
“This leads to a shortage of Hispanic candidates being considered for board seats,” Wilson said.
The United States has the second-largest Spanish-speaking population in the world, second only to Mexico, he noted.
“Companies need to do more to recruit Latinos into the boardroom if they are to compete successfully for the growing Latino consumers and future talent,” said Wilson, whose association hosts programs to help board prospects gain skills and experience to increase their chances of being considered for openings.
Overall, choosing board candidates who are sitting or retired chief executives “slows the advancement of diversity in the boardroom,” Gwin said, “because the pool of current and former CEOs is not sufficiently diverse.”
She added, “Experienced general managers, finance executives and functional leaders also can make significant contributions in the boardroom.”
To Learn More:
Four Boardroom Trends to Watch (Heidrick & Struggles Board Monitor) (pdf)
“Epidemic of Invisibility” for Women and Minorities Found throughout Major Hollywood Media Companies (by Jack Coyle, Associated Press)
Little Progress for Women Execs in California’s Top Corporations (by Ken Broder, AllGov California)
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