Diversity lagging on boards of publicly traded companies, researchers say

There is lagging diversity of minority directors on boards of publicly traded U.S. companies, according to a study released Monday.

Data from ISS ESG, a branch of Institutional Shareholder Services, found that 29 percent of U.S. companies across the Russell 3000 has two or more ethnically diverse directors. That is a jump of 7 points from 2016, when 22 percent of these companies had two or more ethnically diverse directors, Reuters reported.

Compared to female directors, that is a small gain, as 66 percent of the companies had two or more women on their boards, a rise from 39 percent in 2016, the research found. 

The study is scheduled to be presented at a conference on Monday.

Brett Miller, who heads data solutions for ISS ESG, told Reuters that the results show that company boards usually recruit directors who have already served as top executives at other firms.

This causes the limited number of minority directors to stay in demand, as 30 percent of the 817 Black directors have served on more than one board. Among the 17,810 white directors in the study, 19 percent were on more than one board.

The data demonstrates that companies have been more focused on diversifying the gender of their directors instead of the race, with minorities experiencing slower promotion rates. 

A total of 84.2 percent of Russell 3000 companies have no ethnically or racially diverse people serving in the top five executive positions, a decrease of just 1.4 percentage points from 2016, according to Reuters.

Activists have highlighted the lack of diversity among companies as part of the racial justice movement following the police killing of George Floyd, an unarmed Black man, in Minneapolis in late May.

His death sparked demonstrations around the world, which have influenced several institutions and companies to diversify their top brass and update their policies to offer more vocal support for people of color.