News Corp is a network of leading companies in the worlds of diversified media, news, education, and information services.

Get the Wall Street Journal $12 for 12 weeks.Subscribe Now

Please note: The Wall Street Journal News Department was not involved in the creation of the content below.

Culture Risk Oversight: Measures the Board Can Take

Tech Leadership Study: The Rise of the Tech-Focused CXO

Biopharma Poised for Digital Transformation Leap

Global Economic Brief: Trade War Turns to Europe

Trade, Economic Concerns Knock Sentiment Lower: CFO Signals Survey

Compliance Brief: Vexing Anti-Corruption Challenges

Economic Outlooks Hit Multiyear Lows, CFO Signals Survey

MA Sellers Get Proactive With IT Due Diligence

How CFOs Can Play a Vital Role in Unlocking Creativity

Federal CFO: 9 Technology Trends Transforming Government

Business Tackles Cost, Climate Concerns in Tandem

Global Economic Brief: Fed Policy Dissent Rises

Sustainability Disclosure Trends Drive Focus on Financial Impacts

Climate Change: Economic Risks and Challenges For the C-suite

AI Ethics Come Into Focus as the Workplace Evolves

Letter From China: Opportunities Emerge For Financial Services

Global Economic Brief: Saudi Attack Sets New Growth Threat

Extended Stay America CEO Jonathan Halkyard on Strategy and Stamina

Global Economic Brief: What Negative Yields Mean for the Market

Please note: The Wall Street Journal News Department was not involved in the creation of the content below.

Women and Minorities on Fortune 500 Boards: More Room to Grow

A new report looks at the representation of women and minorities on the boards of the Fortune 100 and Fortune 500.

Shifting demographics, investor pressure, and a growing recognition of the positive impact of inclusive leadership have increased the focus on diversity in the C-suite and on U.S. public company boards. Achieving diversity in the boardroom has been a slow journey, but there has been some progress, according to a multiyear study published by the Alliance for Board Diversity (ABD) in collaboration with Deloitte, Missing Pieces Report: The 2018 Board Diversity Census of Women and Minorities on Fortune 500 Boards.

The study found that 38.6 percent of the Fortune 100s board seats34 percent of the Fortune 500s board seatsare held by women and minorities, both increases since 2016, the year the last study was conducted.

The increase in boardroom diversity over the last two years is encouraging, but there remains underrepresentation. Equally important, we know from research that having a diverse board leads to better business results. This is a bottom-line issue, says Linda Akutagawa, chair for the ABD and president and CEO, LEAP (Leadership Education for Asian Pacifics).

At the current rate of progress, the number of women and minorities on Fortune 100 and 500 boards could increase to 40 percent (a target percentage set by the ABD) by the year 2024.* We encourage corporate boards to continue to embrace the benefits of diverse board composition and further their efforts to match the changing demographics we are experiencing in this country today, adds Akutagawa.

The number of total board seats in the Fortune 500 increased from 5,440 in 2016 to 5,670 in 2018. Since 2012, the number of Fortune 500 companies with greater than 40 percent diversity has more than doubled, from 69 to 145. In 2018, women and minorities held 1,929 seats on Fortune 500 boards, an all-time high, compared to 1,677 board seats in 2016 (30.8 percent). Total minority representation increased to 16.1 percent (912 board seats) from 12.8 percent in 2010, the first year Fortune 500 data were captured.

Following are other findings related to Fortune 500 board representation:

African American/Black women gained 32 seats in 2018, an increase of 26.2 percent from 2016. African American/Black men gained 26 seats in 2018, an increase of 8.5 percent from 2016.

Minority men have made almost as much progress in the last two years as they did in the 12 years before that.

Hispanic/Latino men gained 21 seats in 2018, an increase of 14.3 percent from 2016. Hispanic/Latina women gained four seats in 2018, an increase of 9.8 percent from 2016.

Asian/Pacific Islander men gained 25 seats in 2018, an increase of 20.3 percent from 2016. Asian/Pacific Islander women gained 17 seats, an increase of 38.6 percent from 2016.

The study also showed that boards more frequently will pull from a pool of existing minority board members instead of bringing in new directors. African American/Black women and Hispanic/Latinas hold recycle ratesthe rate at which individuals serve on more than one boardof 1.39 and 1.36, respectively. The recycle rate of many minority groups increased from 2016 to 2018. African American/Black men hold the highest recycle rate of any group, 1.41whereas Caucasian/White men have a recycle rate of 1.19.

Of the many correlations examined, the study showed the strongest positive correlation with board diversity was the tenure of the company on the Fortune 500 list. While exhibiting a slight positive correlation, boards with term and/or age limits were not any more likely to have diverse boards.

Fortune 500 seats gained/lost from 2016 to 2018 by gender and race/ethnicity

While the actual number of board seats gained by women and minorities in the Fortune 100  remains relatively small, African American/Black women and Caucasian/White women each saw the largest numbers of seats gained3 for each group. Still, women and minorities remain underrepresented in Fortune 100 boardrooms, whether considered relative to historic numberswhen boards were almost entirely Caucasian/White menor in relation to the rapidly shifting U.S. demographics toward greater diversity.

Following are other findings among the Fortune 100 when it comes to board representation:

In 2018, 19.5 percent of the 1,222 board seats in the Fortune 100 were held by minorities, though that is still a larger percentage than in the Fortune 500 (16 percent).

African American/Black women and Asian/Pacific Islander women achieved the largest increases in board seats: 44.8 percent (13 seats) and 30.8 percent (four seats), respectively. Caucasian/White men saw a decrease of 23 seats, a decrease of 3 percent. Regardless of race, the census found an overall decrease of the number of men on boards of 1.2 percent (11 seats lost).

The total number of companies with greater than 40 percent diversity increased from 33 companies in 2016 to 46 companies in 2018. With the benchmark ABD has set (40 percent women and/or minorities on boards by 2020), the Fortune 100 is leading in achieving that milestone.

Fortune 100 seats gained/lost from 2016 to 2018 by gender and race/ethnicity

Looking across both the Fortune 100 and Fortune 500, the total number of companies with greater than 30 percent diversity increased from 64 companies in 2016 to 75 companies in 2018. With the 40 percent benchmark set by ABD, the Fortune 100 is at the forefront of achieving that milestone. This strong majority of companies with greater than 30 percent diversity is encouraging for the direction of change and will hopefully be a signal as to what ADB may expect from the broader Fortune 500 list in the future, notesDeb DeHaas, vice chairman and national managing partner, the Center for Board Effectiveness at Deloitte.

In fact, ABD hopes that in the next two years, no Fortune 100 company will have less than 20 percent diversity. During that time, it expects boards will do the work to identify and recruit more diverse talent and continue to show how the Fortune 100 leads the pace of change for the Fortune 500.

Moreover, as demographics and buying power** in the U.S. become increasingly more diverse, forward-thinking boards are determining ways to gain more diversity of background, experience, and thought in the boardroom.

More and more companies are realizing the significant benefits of having a diverse and highly skilled board. The report demonstrates that while progress has been achieved, there is still much more work to do, Akutagawa adds. Boards can optimize their diversity by taking intentional actions to expand the pool of women and minority candidates, including reaching out to a broader set of professional networks and considering candidates with a variety of skills, backgrounds, and experiences.

Founded in 2004, theABDis a collaboration of four leadership organizations:Catalyst, TheExecutive Leadership Council, theHispanic Association on Corporate Responsibility, andLeadership Education for Asian PacificsDiversified Search, an executive search firm, is a founding partner of the alliance and serves as an advisor and facilitator. The ABDs mission is to enhance shareholder value in Fortune 500 companies by promoting inclusion of women and minorities on corporate boards.

The ABD and Deloitte utilized a census methodology for the 2018 Board Diversity Census. The Board Diversity Census counts Fortune 500 board directors to provide a measurement of the representation and progress of women and minorities in business leadership and to allow for comparable statistics based not on a discrete list of identical companies but on the Fortune-listed companies in the given years for which the census was conducted.

* This year is calculated assuming that the percentage of Caucasian/White men on boards continues to decrease by 1 percent per year. While this is a simple straight-line trend, this metric provides a sense of the progress to expect in the next decade (while not accounting for the nuances of board terms and board member pipelines).

** The Selig Center estimates that the nations African American buying power will rise to $1.54 trillion by 2022 (a five-year estimated growth of 21 percent, vs. 18 percent for non-Hispanic Whites), driven by inspirational gains in population, income, and education. The Nielsen Company (US), Inc., From consumers to creators; The digital lives of black consumers, September 13, 2018, Asian/Pacific Islanders are the fastest-growing ethnic group in the United States with purchasing power of $986 billion in 2018, up 257 percent since 2000. The Nielsen Company (US), Inc. 2018 Asian American Consumer Report, Asian Americans: Digital Lives and Growing Influence.

Missing Pieces Report: The 2018 Board Diversity Census of Women and Minorities on Fortune 500 Boards

How Boards Can Prepare Their Organizations for the Workforce of the Future

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (DTTL), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the Deloitte name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright © 2019 Deloitte Development LLC. All rights reserved.

Women and Minorities on Fortune 500 Boards: More Room to Grow

An error has occurred, please try again later.

Sustainability Disclosure Trends Drive Focus on Financial Impacts

Calls for greater transparency on sustainability efforts and climate change risk exposure from investors, regulators, customers, and employees are pushing sustainability disclosure into the financial reporting mainstream. CFOs who take the lead to help their company better measure and manage sustainability efforts can address stakeholder demands, improve sustainability performance and risk mitigation, and identify new growth opportunities.

This is the second story in a series exploring sustainability during this weeks U.N. General Assembly. Coming on Thursday: Business Tackles Cost, Climate Concerns in Tandem, Study.

Climate Change: Economic Risks and Challenges For the C-suite

Climate change and its related risks are front and center as the U.N. Climate Action Summit today brings together officials, heads of state, and global business leaders to discuss how to take more decisive steps to combat it. Two Deloitte economists and a sustainability leader discuss relevant economic and business challenges ahead, and executives critical role in addressing risks and opportunities related to the transition to a low-carbon economy.

This is the first story in a series exploring sustainability during this weeks U.N. General Assembly. Coming on Tuesday: Sustainability Disclosure Trends Drive Focus on Financial Impacts.

The movement to create new international tax standards for the digital economy is moving ahead and may ultimately impact business model planning, strategy, and risk management for nearly all multinationals. CFOs should consider how operations that reach overseas markets may potentially be subject to new guidelines being negotiated.

Climate Change: Economic Risks and Challenges For the C-suite

Climate change and its related risks are front and center as the U.N. Climate Action Summit today brings together officials, heads of state, and global business leaders to discuss how to take more decisive steps to combat it. Two Deloitte economists and a sustainability leader discuss relevant economic and business challenges ahead, and executives critical role in addressing risks and opportunities related to the transition to a low-carbon economy. This is the first story in a series exploring sustainability during this weeks U.N. General Assembly. Coming on Tuesday: Sustainability Disclosure Trends Drive Focus on Financial Impacts.

Letter From China: Opportunities Emerge For Financial Services

Chinese leaders have proposed a sweeping set of reforms that could open much of its domestic financial services market to foreign multinational companies (MNCs). Converging pressures on Chinas domestic economy underscore the likelihood that the proposed reforms will be implemented and the importance for executives to understand their strategic implications.

Regulatory complexity, cost pressures, and technology changes are driving tax organizations to rethink their operating models. CFOs and tax directors should consider the benefits and risks of adapting or remaking a tax operating model, and the talent and IT decisions that can lead to effective implementation.

Deloittes Insights for CFOs provides financial executives a customized resource to help them address the strategic, operational and regulatory issues they face in managing their finance organizations and careers, with top-line digests, research, perspectives and technical analyses.