Following a period of increased diversity in corporate boardrooms after the murder of George Floyd, new data indicates a shift back towards white men dominating these positions. Over the past five years, there was a notable rise in racial and ethnic representation (20%) and female representation (18%) on boards in Russell 3000 index companies. However, this trend has reversed, with corporations now hiring white men at the fastest rate in years. In the current year, women constituted a third of new S&P 500 board hires, a decrease from 44% in 2022, and executives of color represented 19% of new hires, down from 44% in 2021. White men made up the majority of new director hires for the first time since 2017.
This demographic shift is attributed to a broader backlash against diversity, equity, and inclusion (DEI) initiatives across corporate America. The widespread backlash, amplified by conservative political rhetoric, has led corporations to scale back their DEI efforts. Institutional investors have lessened their push for diversity, and legal challenges have struck down affirmative action policies and requirements for increased representation of women and underrepresented communities on boards. Public pressure supporting DEI has also waned, with a recent survey showing a significant drop in the perceived importance of DEI as a business priority.
Consequently, fewer boards are planning to add women and people of color. A survey by PwC reveals that the percentage of directors indicating their boards intended to increase gender diversity fell to 9% from 21%, and those planning to add racial or ethnic diversity dropped to 6% from 13%. This slowdown risks eroding previous gains for underrepresented groups, as boards may revert to "narrow specs" in their hiring criteria, favori... download the app to read more
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