2019 U.S. Board Diversity Trends
MAY 31, 2019
As the U.S. annual shareholder meeting season is coming to an end, we review the characteristics of newly appointed directors to reveal trends director in nominations. As of May 30, 2019, ISS has profiled the boards of 2,175 Russell 3000 companies (including the boards of 401 members of the S&P 500) with a general meeting of shareholders in 2019. Based on our review of 19,791 directorships in the Russell 3000, we observe five major trends in new director appointments for 2019, as outlined below.
- Board renewal rates continue to increase, as board refreshment, director qualifications, and board diversity remain high-priority issues for companies and investors.
- The percentage of women joining boards reaches a new record high, with 45 percent of new Russell 3000 board seats filled by women in 2019 (compared to only 12 percent in 2008) and 19 percent of all Russell 3000 seats held by women.
- Ethnic diversity also reached record highs, but has grown at a much slower rate, with approximately 10 percent of Russell 3000 directors currently belonging to an ethnic minority group, while 15 percent of new directors are ethnically diverse.
- New director appointments focus on non-financial skillsets, with an increased proportion of directors having international experience, ESG expertise, and background in human resources.
- The average director age continues to increase, as the appointment of younger directors is less frequent than in previous years, with only 7.2 percent of new directorships filled by directors younger than 45 years, compared to 11.5 percent of new directors in 2008.