What exactly is standing in the way of more diverse boards? As it turns out, there are many barriers, many of which Lissa and Marilyn explored.

Lack of Turnover on Corporate Boards

There’s a lack of turnover on boards – especially corporate ones. At S&P 500 companies, there were only 395 new directors appointed in the 2022 proxy year – which averages out to less than one per company. Nearly three-fourths of these new directors are from historically underrepresented groups, which shows that diversity is a focus.

Typically, boards have elections either once a year or one every three years if there are staggered terms. But oftentimes, directors run uncontested, so they’re renominated time and time again.

To make matters worse, very few public companies (a mere 6%) have term limits for corporate board members. Among those who do, 73% have terms limits of 15 years or longer.

All too often, directors sit on boards for years on end, and boards rely almost exclusively on retirement, voluntary step-down, or death for board refreshment. That means the opportunities to bring in fresh, more diverse blood are often few and far between.

The Way People Enter Board Service

Another barrier to board diversity is the way people traditionally enter board service – and the criteria they must satisfy to be considered.

When looking for new board members, current directors are often asked to tap into their networks. But the problem is, our networks tend to be made up of people like us. So, if a board is full of white men, they likely have networks made up of white men.

The requirements boards establish for candidates can also be a barrier to diversity. For example, boards typically seek out prospective directors with board experience. However, the prominent group of people who meet this criteria are white men. It’s nearly impossible to recruit diverse candidates from a group that largely looks the same.

In addition, governance and nominating committees often seek out prospective board members who are CEOs or in the C-Suite. However, there is a lack of historically underrepresented groups in these roles. For example, only about 5% of CEOs are women. It’s nearly impossible to find diverse candidates when tapping into a small, homogenous pool.

Underlying Bias

Some boards believe they’re sacrificing something to bring on more diversity. For example, they might think that focusing on bringing on a woman, person of color, or member of another historically underrepresented group means they’ll miss an opportunity to add someone with the necessary skills. Others might believe that doing the bare minimum to meet Nasdaq’s requirements – adding one woman and one person of color – is good enough.

These are both myths. There are plenty of qualified candidates from underrepresented groups. Finding them requires boards to cast a wider net and start looking in the right places.

What’s more, boards shouldn’t perceive increasing diversity as “one and done.” Instead, it should be an ongoing focus.