Pour une gouvernance créatrice de valeurs®

Women, once a rarity on corporate boards, have made real gains in recent years following concerted campaigns by big investors to increase gender diversity and state legislation that set targets. [...] “The number of Black directors has declined and I put a spotlight on a Black director for that reason.” Little hard data is available about the racial composition of America’s corporate boards. Public companies don’t have to report the race of their directors and, until recently, having a woman often was enough to appease those pushing for more variety. But about a dozen of the largest companies by market value in the S&P 500 Index have no Black board members, according to data gathered by Bloomberg News. That stands in contrast to those that have women directors; last year, the final all-male board of a company in the S&P 500 Index went extinct. More critically, the number of Black corporate directors has stalled or even declined. Although about 10% of directors at the 200 biggest S&P 500 companies are Black, according to executive recruiting firm Spencer Stuart Inc., the firm says the percentage of Black executives joining boards in 2020 fell to 11% from 13% the year before. [...]  If the progress for women in the boardroom is any indication, further gains may require stepped up outside pressure from activists, the large money managers that own shares in most of the country’s biggest corporations and government mandates or legislation. BlackRock Inc., Vanguard Group Inc. and State Street Corp., the three biggest asset managers, began pressuring companies and even voting against sitting male directors at companies with boards made up only of men. Women—most of them White—now hold 28% of all board seats at major corporations, according to Bloomberg data. [...] “Most board members get their seats because of the network,”

Throughout American history, there has never been a sense of urgency to increase the numbers of Asian Americans in corporate, professional, or civic leadership positions, despite their success in the upper-middle ranks of a multitude of fields, most notably medicine, engineering, and information technology. Asian Americans are still in the phase of breaking the color barrier, sometimes referred to as the “bamboo ceiling.” (e.g., Andrew Yang, Nikki Haley). Similarly, there has not been a sense of urgency to increase the numbers of Asian Americans in the boardrooms of the largest public company. Is that about to change?

In 2013, California followed the transnational trend and passed a voluntary quota for women on corporate boards. While many developed economies had already adopted hard quotas, California passed a much softer one. Over the following years, shocking tales of sex inequality and harassment surfaced in California’s marquee industries, Hollywood and Silicon Valley. As a result, the state hardened its quota in 2018. Affirmative action controversies dominated the debate over the quota. The low regard for California’s overall corporate law did not help inspire respect.

Earlier this month, three separate shareholder derivative lawsuits were filed in California federal court against the directors and officers of Oracle Corporation, Facebook, Inc., and Qualcomm, Inc., respectively. The three complaints, filed by the same lawyers, contain intentionally provocative allegations that, despite public statements emphasizing the importance of diversity within their respective organizations, the boards and executive management teams of Oracle, Facebook, and Qualcomm, remain largely white and male, and have failed to deliver on their commitments to diversity. While calls to strengthen commitments to diversity at public companies have steadily increased, these complaints go a step further and seek to reshape the boards and executive teams through litigation and hold directors and executive officers personally liable for perceived diversity shortcomings. [...] Takeaways: 
(1) Boards, and those who advise them, should pay careful attention to the Oracle, Facebook, and Qualcomm cases. These cases will likely serve as “test cases” and may catalyze similar complaints against other companies in the near term. [...]
(2) Boards of companies committed to diversity and inclusion should continue to regularly discuss those matters, set appropriate diversity and inclusion goals for the organization and measure the company’s progress in achieving these goals. [...]
(3) Companies should continue to consider their public statements on diversity and inclusion matters, any dialogue they have had with stakeholders regarding their public statements and how future public statements will reflect the companies’ efforts on diversity and inclusion matters and progress towards achieving their goals. [...]

As reported by the WSJ, a new milestone has finally been reached for board gender diversity: there are no longer any companies in the S&P 500 with all-male boards! Reaching just that one milestone has not exactly been expeditious. According to the WSJ, one in eight S&P 500 boards was all male in 2012. In 2019, women hold 27% of all S&P 500 board seats, up from 17% in 2012—certainly an improvement, but still far from anyone’s idea of gender parity. Progress seems to be even slower among companies in the Russell 3000 where, the WSJ reports, as of the first quarter of 2019, 376 companies still had all-male boards (19.3% women overall), reflecting a decrease from 457 in the fourth quarter of 2018 (18.5% women).