Corporate boards have become significantly more diverse over the past five years, according to a new˛report˛from The Conference Board and ESGAUGE. The share of female directors in the S&P 500 increased from 23% in 2018 to 32% last year, while the reported share of racially/ethnically diverse directors grew from 20% in 2018 to 25% last year. As the report points out, however, the reported growth in both racial and gender diversity has slowed in the past year. The share of reported female direc-tors increased by one percentage point, from 31% in 2022 to 32% in 2023. And the share of reported racially/ethnical-ly diverse directors remained virtually unchanged, rising from 24% in 2022 to 25% in 2023. The report identifies a key factor in the slowdown: The 2023 class of new cor-porate directors is less diverse in terms of race and gender than the 2022 class. The class of new directors last year was 38% female, compared to 43% in 2022. The percentage of racially/ethnically diverse directors among new board members saw an even steeper decline, drop-ping from 45% in 2022 to 36% in 2023. The report also notes that the actual levels of racial/ethnic diversity may be higher than the reported levels, given the reluctance of some directors to self-identify as being part of a demographic group. “Directors with diverse racial and ethnic backgrounds can bring new view-points into the boardroom that enrich boardroom conversations,” said Claudia Allen, senior advisor with the KPMG Board Leadership Center.˛ “The plateau-ing of disclosure on director race and ethnicity suggests that in addition to considering the diversity of their board, directors also need to consider whether it is being fully disclosed.”
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