A new report published by consultancy ISS Corporate Solutions has revealed that since the killing of George Floyd last year at the hands of Minneapolis police, there has been a significant rise in the number of African-American directors who have been hired on corporate boards in the United States.
Leaders of major companies in the US which were headed mostly by white men had promised to do better to recruit, retain and promote people of colour following the racial reckoning that was sparked in Corporate America by the social justice protests that followed the murder of Floyd one year ago.
According to ISS Corporate Solutions report, between July 1, 2020 to May 19, 2021, 165 directors who are Black were appointed to their boards by S&P 500 companies out of a total of 513 new corporate board members which accounted for about 32 per cent.
In comparison, according to the analysis, only 55 Black board members out of 485 total new directors had been appointed by S&P 500 companies in the same period a year earlier which accounted for only 11 per cent of the total new hiring.
“The needle has clearly moved,” said Marija Kramer, head of ISS Corporate Solutions, in a statement.
Calls to corporate America to achieve more transparency on race have been given by investors. There have been proposals for holding corporate ballots for making it mandatory to hold racial equity audits for various boards so that companies are able to garner support from shareholders. The audits analyze a company’s impact on civil rights, equity and diversity.
Almost about 50 per cent of the new directors who are Black were becoming board members of public limited companies for the first time, the ISS Corporate Solutions found. Prior to this only about one third of Black directors were new to public board service.
Also in California and Illinois, companies also were faced with new rules on board diversity. The stock exchange operator Nasdaq Inc is set to introduce a new rule under which it will become mandatory for the companies it lists to make public reports about the number of directors their boards have in terms of gender as well as in categories such as Black or Hispanic and LGBTQ+. That proposal is still awaiting regulatory approval for implementing the new rules.
The exchange wants boards to have at least one woman and one minority or LGBTQ+ member, or explain why they do not.
(Adapted from Reuters.com)