ISS Reports on 2019 Diversity Trends on Corporate Boards

ISS in its latest report recorded continuing shifts in the composition of corporate boards reflecting greater diversity in skillsets, gender and ethnicity. ISS, as of May 30, 2019, profiled the boards of 2,175 Russell 3000 companies (including the boards of 401 members of the S&P 500) with a general meeting of shareholders in 2019. Based on its review of 19,791 directorships in the Russell 3000, ISS outlined major trends for 2019, including: increased board renewal rates, a record high percentage of women joining boards; a record high percentage of directors from ethnic minorities joining boards; an increase in the diversity of skillsets in new directors; and a slowdown in the appointments of directors under age 45. Following are other observations from the ISS survey:

• 2019 saw the biggest jump in the overall gender diversity, with the S&P 500 predicted to reach 30 percent directorships held by women in the next couple of years.
• A record number of ethnic minorities joined boards as new board members in 2019, with more than one-in-five new directorships being filled by non-Caucasian nominees at S&P 500 companies, while approximately 15 percent of new board seats at all Russell 3000 companies are filled by minorities (the figure stands at 13 percent when excluding the S&P 500).
• Relative to tenured directors, ISS observed an increase in the percentage of new directors with expertise in technology (10 percentage points), sales (8 percentage points), international experience (8 percentage points), and strategic planning (6 percentage points). At the same time, ISS observed a decrease in some traditional skills, such as financial expertise, audit expertise, and CEO experience.