Corporate boards in the U.S. have never been more diverse. Those same boards are now hiring white guys at the fastest clip in almost a decade.
White men made up a majority of new directors added this year at S&P 500 companies for the first time since 2017, according to data from the research firm ISS-Corporate. Interviews with directors and recruiters make clear that boards are seeking candidates with experience as chief executive officers to help navigate economic and political turmoil, particularly tariffs. And because many of those executives began their careers decades ago, when leadership was less diverse, those being picked now are disproportionately white and male.
At the same time, recruiters say, efforts to broaden representation has slipped down boards’ priority lists amid the Trump administration’s backlash against diversity, equity and inclusion practices. That’s providing the cover to make such hires without the kind of negative reaction boards might have expected when DEI efforts took off after George Floyd’s murder by a police man in 2020.
“What was grossly underappreciated five years ago — a candidate that was male, stale and pale — is now very much at the table to be considered against any and all other candidates,” said Robert Travis, who works on director searches as a managing partner at executive recruiter Boyden.
Through the pandemic and after, boards sought to bolster diversity and build their digital and human-resources expertise, areas with a broader pool of potential directors. Many of those hires now lead and sit on the powerful committees that decide who gets new board seats.
They’re now asking recruiters to find leaders who have run companies or big business units, telling them that other considerations matter less. The most highly prized recruits are current or former chief executive officers.
American Express Co., Keurig Dr Pepper Inc., Molson Coors Beverage Co., Nike Inc. and United Parcel Service Inc. are among S&P 500 companies adding current or former CEOs to their boards this year. The group of new directors includes the current and former chiefs of Colgate-Palmolive Co., Brown-Forman Corp., Hasbro Inc. and Sherwin Williams Co.
Some 55% of the more than 440 new directors appointed to S&P 500 boards through Sept. 24 of this year were white men, ISS-Corporate found. Women won about a third of board seats, down from a peak of 44% of new seats in 2022. Non-white directors made up 20% of board hires, down from 44% in 2021.
An Equilar Inc. study on members of the Russell 3000 Index, which includes smaller companies that aren’t part of the S&P 500, found the return to hiring white men for board positions gained steam earlier, in 2023.
Recruiters and directors interviewed for this report said the Trump administration’s anti-DEI push isn’t directly guiding board appointments, but there’s no doubt the atmosphere has changed. This year, for example, Goldman Sachs Group Inc. abandoned a pledge to refuse initial public offering business with companies that had all white, heterosexual, male boards. The new backdrop reduces the risk of criticism, including from shareholders, for white male hires.
Ellen Zane, who sits on several public company boards and is on the nomination-and-governance committee at Boston Scientific Corp., notes that in many cases boards have diversified faster than executive suites have.
For example, about 35% of S&P 500 directors are women, while less than 10% of CEOs are female. Last year, white men made up less than half of S&P directors for the first time, and ISS-Corporate said that held true this year, too.
More often than not, appointing an executive to a board who meets the needs of the current business environment means picking a white man, said Zane, the former chief of the Tufts Medical Center in Boston and a director for the New England chapter of the National Assn. of Corporate Directors.
“There were large shareholders that would absolutely, positively ding a company if they disagreed with how you had fulfilled your diversity goals,” said Zane, who also sits on the governance and compliance committee at Haemonetics Corp., a healthcare company. “Then all of a sudden, it completely changed.”
The emphasis on CEO skills is evident in the biographies of the new directors included in corporate filings this year, with a significant increase in mentions of leadership, financial knowledge and chief executive experience, the ISS-Corporate analysis showed.
UPS is a case in point. Of the nine new directors it has added to the board since 2017, six were women or men of color, the company said in response to questions about its board appointments.
This year, UPS appointed two white men with CEO experience to its board. In announcing the appointment of former Sherwin-Williams chief John Morikis, UPS highlighted his “extensive experience leading a highly complex, multinational organization, coupled with decades of public company board experience.”
Nike had no comment. American Express, Keurig Dr Pepper and Molson Coors didn’t return requests for comment.
With corporate boards now composed of more than one-third women and 12% Black directors, board representation is getting closer to society at large, reducing the perception that directors need to prioritize diversity, according to Jun Frank, the global head of compensation and governance advisory at ISS-Corporate.
“We are probably hitting somewhat of an equilibrium or plateauing of the trend, if not a reversal,” he said.
James Drury, a recruiter who helps companies find board seats for their executives, had tracked a decline in board members with CEO experience in recent years. Now, he said, nominating committees are prioritizing candidates with specific corporate experience that will help them navigate the current environment. His research shows that 72% of companies said diversity was a top priority in 2020; in his most recent survey, only 5% of companies said the same.
But Anna Catalano, a former marketing executive at BP Plc who sits on the nominating committees at energy company HF Sinclair Corp. and materials company Ecovyst Inc., said it’s wrong to think that companies are turning away from diversity completely.
“I don’t think it’s any kind of a nefarious anti-woman, anti-people of color, or ‘Yay, it’s white men world again!’ ” Catalano said.
“Given the challenges that face a lot of companies now, they’re very comfortable bringing in a sitting or just recently retired CEO because they’re living this change.”