Diversity Takes a Hit—in the Boardroom

In a host of quiet and public ways, companies have been pulling away from diversity initiatives in their hiring and promotion practices. But the trend isn’t limited to that specific context: It has impacted board-director appointments in a big way, too. 

After steadily increasing over the last decade, including a spike after the George Floyd protests, the number of Black directors appointed to corporate boards declined in 2024 for the second consecutive year. According to data from The Conference Board and ESGAUGE, only 12% of new directors appointed to companies in the Russell 3000 stock index last year were Black, down more than half from just two years ago. At the same time, the number of new white directors bounced back to 69%, up from a historic low of 52% in 2022.

A similar scenario is playing out among S&P 500 companies, where Black executives made up only 10% of new director appointments, five percentage points fewer than in 2023. “It’s incredibly disheartening news,” says Nina Boone, North America leader of diversity and inclusion for Korn Ferry.

The decline in Black director appointments dovetails with the elimination of programs tying metrics and incentives to the hiring and promotion of diverse talent that many major corporations instituted in 2020 in response to the #BlackLivesMatter movement. Critics of the diversity hiring raised fairness questions, but Korn Ferry global DE&I and ESG strategist Andrés Tapia says that boards are letting the current cultural and political climate dictate how they govern. The prime drivers of the decline, he says, are the Supreme Court’s ruling against affirmative action in college admissions and a California court’s decision to strike down a law mandating companies to appoint at least two directors from underrepresented groups. Diversity initiatives have also lost the backing of investors, with one of the most prominent institutional investors recently eliminating a requirement that boards appoint diverse directors. Tapia says companies, boards, and investors are all “moving preemptively” so they don’t get attacked. “It’s only going to get worse,” he says.

The recent reversal bucks a decade-long trend of steady gains in Black representation on corporate boards. Since 2014, the number of Black directors has increased 67%, for instance, and the overall number of directors from underrepresented groups has more than doubled, to 26%. The fear among experts is that the gains of the past decade will be erased over the next one.

Proponents of diversity say these decisions could end up hurting companies from both a talent and business perspective. Kate Shattuck, a managing partner at Korn Ferry, says the goal of having a diverse workforce, leadership team, and board is to make companies stronger and more profitable. She points to studies showing that companies with diverse leadership teams and boards outperform their peers financially. “My hope is that companies didn’t forget that diversity in gender, race, thought, and experience can help them reach more customers, capture more market share, and lead to greater innovation,” she says.

For his part, Tapia says that making the case on the basis of growth rather than representation is the way to regain momentum for the appointing of Black directors and those from other underrepresented groups. “Don’t fight the battle over metrics, but stay the course on the business case,” he says.

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