45% of new board members in Fortune 500 are women
45% of all board members in Fortune 500 companies appointed last year were women. The percentage of women on the boards have increased from 19% in 2015 to 29% in 2021. The biggest increase was in 2017 when there was a lot of focus on the Me Too-movement, a report from US leadership consultancy Heidrick& Strugges shows.
43% of all new appointees 2021 were first time directors. The report says that companies are increasingly looking to directors with diverse experiences and expertise to provide insight and help them navigate an ever-changing landscape.
”And, on aggregate, these first-time directors bring a wider spectrum of functional experience, as they more often have C-suite experience other than having been a CEO or CFO.”
”The war in Ukraine is a clear example of this expectation; companies have been pressured by a range of stakeholders to sacrifice their profit and operations for a greater good. Even more universal, there is the expectation—which is to become a regulatory requirement in more countries—that companies act in a sustainable manner across a range of issues”, the report says.
There was an increase in the share of seats that went to directors with sustainability and cybersecurity experience. There was mixed progress on racial and ethnic diversity: The share of seats filled by Black directors held relatively steady at 26%, after a sharp rise in 2020 but both Asian or Asian American and Hispanic or Latinx directors are still heavily underrepresented, according to the report.
”The newly appointed cohort of directors has brought to boards a broader pool of experiences in areas such as digital, financial risk and compliance, cybersecurity, and sustainability. Digital skills have become table stakes, because senior executives are increasingly expected to be more digitally fluent, if not savvy.”
“The share of seats filled by directors with a financial risk and compliance background has tripled since 2018, likely because companies are trying to build more resilience to the increased levels of uncertainty. And boards seem to have become more focused on the threat posed by cybersecurity breaches, with the share of seats filled by people with cybersecurity experience jumping from 8% in 2020 to 17% in 2021.”
”So, while there has been progress in broadening the spectrum of experience around boardroom tables in Fortune 500 companies, most boards will need
to continue to think more strategically, holistically, and continuously about refreshment to make sure they not only are prepared for today’s challenges but also have the resilience to respond to future unexpected ones.”
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