Egon Zehnder’s Latest Global Board Diversity Tracker Shows Heightened Need for Inclusivity on Corporate Boards as They Diversify

ZURICH, November 14, 2022 — Egon Zehnder, the world’s leadership advisory firm, today released the results of its 2022-2023 Global Board Diversity Tracker, revealing that while corporate boards are seeing steady progress on gender and racial and ethnic diversity, more action is needed on the broader goal of inclusivity which will improve the effectiveness of increasingly diverse boards. 

Highlights from the Tracker include:  

• The number of major companies with at least one woman on board has risen to 93 percent from 89 percent in 2020. 
• Fastest progress over the past 10 years is dominated by Western European countries, but Australasia, Canada, South Africa and Malaysia have transformed their boards too. 
• In the U.S., 19 percent of directorships among Russell 3000 companies were held by non-white board members, up from 13 percent in 2019, according to data analyzed from Institutional Shareholder Services.   

These increases in board diversity have illuminated a new need – for those organizations that have prioritized diverse representation to now develop an inclusive board culture that enables new perspectives to be shared and valued. As boards face increasing external pressure to modernize their operations, board chairs will play an important role as champions of inclusion and board effectiveness, while continuing to expand the definition of diversity.  

While every seat on a board is highly impactful, further progress is needed in diversifying board leadership representation: 

• In 2022, 25 percent of board committee leaders globally were women, up from 21.2 in 2020. There also was a slight increase in non-executive chair positions held by female directors to 8.4 percent, up from 7.2 percent in 2020, and to 3.7 percent in the number of female executive chair positions, a 0.7 percent increase from 2020. 
• According to our analysis of Institutional Shareholder Services data, non-white directors in the Russell 3000 held 19 percent of directorships in 2022 and 9 percent of board chair roles. At the committee level, 13 percent of non-white directors were audit, compensation or nominating and governance committee chairs. 

“We continue to see positive progress in diversifying boards, but we must recognize the hard work has only just begun and an increased focus on inclusion will ultimately drive meaningful progress. While every board’s journey will be different, the destination should look similar: a board with an inclusive culture with directors who bring a mix of experience that integrate unique perspectives into every decision the board makes,” said Pam Warren, co-leader of the Global Diversity, Equity & Inclusion Practice at Egon Zehnder. “To get there, it’s time to shift our attention to driving inclusivity by rethinking the process, culture, and operations that define the fabric of our boards. This will require vulnerability, learning and a commitment to change but the results will have deep impact for years to come.” 

LGBTQ+ diversity also remains underrepresented and often undefined on boards. An Out Leadership report found that less than 1 percent of Fortune 500 companies have inclusive policies aimed at LGBTQ+ leaders, and only 26 out of 5,670 board seats are held by LGBTQ+ leaders—several of which are held by the same person. The report also found that only 41 Fortune 1000 companies define board diversity as inclusive of LGBTQ+ individuals.  

Since the last Global Board Diversity Tracker two years ago, however, some progress happened: In 2021, Nasdaq enacted board diversity requirements for its roughly 3,000 listed companies to hire at least one woman as well as a racially diverse or LGBTQ+ individual, in addition to requiring disclosure of the demographic makeup of their board directors. In Canada, provisions have been put in place to increase female representation on boards to 50 percent and other minority groups (including members of the LGBTQ+ community) to 30 percent within five and seven years, respectively. 

“It’s encouraging to see progress in the right direction, especially in countries such as Canada where there are provisions in place aimed at increasing women and minority representation, which includes LGBTQ+,” said Cynthia Soledad, co-leader of the Diversity, Equity & Inclusion Practice at Egon Zehnder. “As boards transition from focusing solely on representation to also considering inclusion, it will be crucial to evolve all board processes to be more inclusive, including meeting norms, director onboarding, and board leadership succession planning. The board chair will play a critical role in making this transition toward action.” 

For additional data and action plan for inclusion within corporate boards, view the full Global Board Diversity Tracker report:

Released biennially over the last 18 years, the report tracks and analyzes global board diversity progress. This year’s report analyzed a total of 19,958 boards seats – using data from 1,776 publicly-traded companies across 44 countries with a combined market capitalization of €8bn – organizations that have the influence and opportunity to drive economic and culture impact for entire societies, as well as individuals. As every board’s journey will be different, Egon Zehnder included in the report additional sectors of diversity, offering case studies with directors, chief executives, and chairs globally to discuss the inclusion of ethnicity, sexual orientation, and other perspectives in the boardroom.   

Egon Zehnder is the world’s preeminent leadership advisory firm, inspiring leaders to navigate complex questions with human answers. We help organizations get to the heart of their leadership challenges and offer honest feedback and insights to help leaders realize their true being and purpose.Our 600 consultants across 66 offices and 36 countries are former industry and functional leaders who collaborate seamlessly across geographies, industries and functions to deliver the full power of the Firm to every client, every time.

We believe that together we can transform people, organizations and the world through leadership.

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