The CEOs of major American corporations aren’t dopes. They want to sell their goods and services to customers from virtually every race, ethnic group and religion, and many want a diverse workforce to do the deals.
So why, more than a decade into the 21st century, are the boards of directors of most Fortune 500 companies still gatherings of old white men? The CEOs and their mostly lookalike boards decide on markets to enter, select successors, promote executives and pick new board members.
But if everyone at the meetings is similar to the man in charge, who will think differently? The 2010 study Missing Pieces: Women and Minorities on Fortune 500 Boards reports that among the 2010 Fortune 500 companies, Black men and women only totaled only 4.6 percent of board members.
White men held 4,237 board seats, white women 693 and Black men and women 252. Also, since 2004, Black board representation in the Fortune 100 fell from 10.1 percent to 6.3 percent.
The report's weakness is that it provided no analysis as to why Black representation is low, or fell.
One perspective is that despite increasing diversity in the United States, many white CEOs may have even fewer Blacks in executive positions around them than in the past and they may assume, incorrectly, that there are no individuals outside of their circle that would have the experience and capacity to take a board seat.
Seven Fortune 500 companies had at least two Black members. They were IBM, MetLife, Prudential Financial, Exelon (a utilities firm), PG&E (utilities), Eastman Kodak and Northern Trust Corp. (a financial institution).
The Missing Pieces study was sponsored by the Alliance for Board Diversity (ABD), a coalition of Black, Hispanic, Asian and women corporate executives of every race that decries this corporate myopia as an illogic approach to business.
ADB’s research points to the benefits of a diverse boardroom—including enhanced financial performance. Yet, the group says that white men still dominate corporate boards and that women and minorities are still vastly underrepresented.
The ADB foresees trouble ahead as a result. It says unless “the trend is reversed and U.S. companies begin to reflect their shareholders, markets and employees, they will fail to reach maximum potential as leaders in the global economy.”
There were two other studies about corporate diversity published recently by branches of the Urban League on the East Coast and in the Midwest. The Philadelphia Urban League spotlighted that although 42 percent of the city and 20 percent of the region’s population is Black, only 30 out of the 678 members of 78 of the region’s largest corporations were lead by African-Americans.
The second report, focused on Madison, Wisconsin, revealed that there are only seven Black CEOs in the city, and all but two of those run nonprofits.
(Photo: Rebecca Cook/Reuters)