A year on from the racial justice protests sparked by the murder of George Floyd, companies in the US have responded by boosting the appointment of black directors to S&P 500 boards.

Research from ISS, the global proxy advisers, says that between 1 July 2020 and 19 May 19 this year almost a third—32%—of all freshly appointed directors were black. Just over half, 54%, were white. In the previous year, ISS says, the comparable figures were 11% and 74%. The percentages represent 52 black directors for the year to May 2020, and 148 in the most recent year.

Amounting to a 200% rise inside a year, the numbers speak of a significant corporate reaction to the protests and the intense focus from campaigners and policymakers on racial equality.

“The needle has clearly moved,” says Marija Kramer, head of ISS Corporate Solutions, “as companies respond to the chorus of investors and other stakeholders who since last summer have called for greater racial and ethnic diversity within corporate boardrooms.”

According to the research, the big winners are those “new” to boardroom positions. Kramer believes that “suggests the pipeline of minority director talent is growing at a faster rate than previously evidenced”.

Diversity quotas

Not everyone is impressed with the figures. Richard Leblanc, a professor of governance at York University and Harvard, says the term “moving the needle” is designed for “managing expectations”. He believes little will change fundamentally unless the US adopts others measures, such as strict term limits for directors and quotas.

Despite states like New Jersey and California—and the tech market NASDAQ—using diversity quotas, unless the US can come to terms with those kinds of policies, LeBlanc believes progress will be “glacial”.

“Boards left to their own devices, even with prompting from shareholder advisory firms like ISS, are incapable of voluntary change from within.

“It is a tremendous talent loss when highly qualified female and racialized [sic] directors are side-lined to often time their less qualified white, male and connected counterparts with pre-existing relationships to management or other directors,” Leblanc says.

Lack of black executive directors

The UK too is still managing better representation of ethnic minorities in boardrooms. In March the Parker Review revealed that most FTSE 100 companies had achieved their “one in 2021” target of appointing a director from a minority group. Though there remain laggards, “corporate Britain… is becoming more comfortable with boardroom diversity”.

Elsewhere, there are concerns pointing towards a more complex position. Research from search firm Green Park this year showed there were no black chairs, chief executives or CFOs in the FTSE 100.

Those findings may reflect efforts to recruit to non-executive positions while giving less attention to executive roles.

But there may also be much for company leaders to learn as they address boardroom diversity. Psychologists Doyin Atewologun and Fatima Tresh write in an article for Board Agenda that boards need to address their assumption that diversity and meritocracy are at odds.

“For further progress in diversity at executive and board levels, board should reconceptualise a lack of proportional representation as evidence of a non-merit based and biased system,” they write.

They also suggest that addressing “underrepresentation” may not be the whole problem.

“Yes underrepresentation can indicate marginalisation. However, proportionality is not equivalent to power equity.

“The work remains, on multiple intersectional identity fronts, to achieve equity, especially with regards to access to and distribution of power in our largest organisations.”

There is an enormous—and justified—focus on diversity. It is clear much remains to be done.