Progress on improving the diversity of US boardrooms appears to have gone into reverse, with new research showing that ethnic diversity among senior members of key boardrooms has fallen.

The results come amid efforts by the current White House administration to remove diversity, equity and inclusion (DEI) programmes from federal agencies, a policy launched with an executive order earlier this year.

In an article for the Harvard Law School blog on corporate governance, Equilar, a consultancy, has found that among Russell 3000 companies the number of ethnic minority appointments has fallen 22% since 2022.

“While the executive order only applies to federal agencies, its ripple effects are evident amongst public corporations, where larger companies in particular appear to be slowing or scaling back DEI initiatives,” writes Equilar.

“This raises the question on potential long-term impact for underrepresented ethnic groups.”

‘Illegal and immoral’

Executive Order 14151 outlawed DEI programmes at federal agencies, dubbing them “illegal and immoral”.

Equilar writes that, in 2022, 23.3% of new directors’ appointments at Russell 3000 companies were from an ethically diverse background. Last year, the proportion was 18.2%.

The space of three years has seen a slight decline overall in the number of ethnically diverse directors to 19.1%.

Equilar says: “Board diversity continues to be a key element of corporate governance and changes in the political and regulatory environment are likely to be reflected in future corporate diversity initiatives.”

The UK’s stance

As the anti-DEI policy takes hold in the US, business leaders in the UK have urged boards to stand firm. However, it is understood UK operations of US companies may have come under pressure to change course.

In May, the chairs of eight European regulatory bodies—among them the UK’s Financial Reporting Council—issued a statement, saying: “In challenging times the chairs stress that long-term success includes diverse leadership, integrity and stakeholder engagement.

“In these volatile times, corporate governance codes provide much needed continuity and direction, offering a stabilising compass that helps companies navigate complexity with clarity of purpose.”

When Heidrick & Struggles reported on FTSE 350 board appointments in 2024, it found that 21% were from an ethnic monitory, a figure that has been steady since 2021.

Last year, the Parker Review said 95 of the FTSE 100 companies had at least one board member from an ethnic minority background. In the FTSE 250, the figure was 204 (82%).

At the time of reporting, overall representation was rising, and the review found that there were 274 minority directors in the FTSE 250 and 201 among the FTSE 100.

In March this year, the government defended the inclusion of DEI in UK governance codes.

Baroness Twycross, in charge of shepherding a new code for football governance through the House of Lords, said the government had “not changed our view that equality, diversity and inclusion is a key part of good corporate governance”.