This practice note discusses the importance of corporate board gender and racial diversity. Among other things, this practice note surveys state legislation on corporate board diversity and offers best practices for employers on how to create such diversity.

In particular, this practice note discusses:

  • Historical Background of Gender Diversity on Corporate Boards
  • Historical Background of Racial Diversity on Corporate Boards
  • State Legislation on Corporate Board Diversity
  • Best Practices on Corporate Board Diversity

For more guidance on workplace diversity, see Workplace Diversity, LGBTQ, and Racial and Social Justice Resource Kit. For more guidance on ESG, see Environmental, Social, and Governance (ESG) Resource Kit.

For tracking of recent legal developments on diversity and inclusion issues and other key federal, state, and local Labor & Employment legal developments, see Labor & Employment Key Legal Development Tracker (Current).

Historical Background of Gender Diversity on Corporate Boards

The #MeToo Movement

Activist Tarana Burke began using the #MeToo hashtag in 2006 to raise awareness about women who had been sexually abused. Eleven years later, actress Alyssa Milano posted a viral tweet: "If you've been sexually harassed or assaulted write 'me too' as a reply to this tweet." Milano's tweet was shared over 200,000 times, sparking a global movement in the United States against sexual harassment and abuse. Gurvinder Gill, Imran Rahman-Jones, Me Too Founder Tarana Burke: Movement is Not Over, BBC (July 9, 2020). Along with Burke, Milano, and many others who spoke up about sexual abuse and harassment in the #MeToo movement in the United States, powerful #MeToo movements grew around the globe.

The Swedish #MeToo movement began in 2017 following the high-profile case of Jean-Claude Arnault, where 18 women came forward with allegations of sexual misconduct that had taken place over a period of 20 years, leading to the cancellation of Arnault's 2018 Nobel Prize in literature. Meighan Stone, Rachel Vogelstein, Celebrating #MeToo's Global Impact, FOREIGN POLICY (Mar. 7, 2019); Catherine Edwards, Sweden in Focus: One Year On, What did #MeToo Achieve in Sweden, THE LOCAL se (Dec. 10, 2018).

In South Korea, the #MeToo movement began in 2018 with a televised interview of the lawyer Seo Ji-hyun, who took the unprecedented step of publicly accusing her former boss of sexual misconduct. "Her courage inspired hundreds of others to step forward, leading to the sudden resignation of several Korean sports figures, literary elites, and politicians." Meighan Stone, Rachel Vogelstein, Celebrating #MeToo's Global Impact, FOREIGN POLICY (Mar. 7, 2019); Choe Sang-Hun, Ex-Prosecutor in South Korea #MeToo Case Is Sentenced to 2 Years in Prison, THE N.Y. TIMES (Jan. 23, 2019).

In Pakistan, Khadija Siddiqi, a law student, was stabbed 23 times in 2016 by a fellow classmate after spurning his advances. Her attacker was later acquitted, bringing widespread attention to a court system that routinely excused perpetrators of violence against women. After the acquittal, more than two million supporters used the hashtag #JusticeforKhadija to champion Siddiqi's case on social media, ultimately helping her win her appeal. Meighan Stone, Rachel Vogelstein, Celebrating #MeToo's Global Impact, FOREIGN POLICY (Mar. 7, 2019).

In India, large scores of women have also come out with stories of sexual harassment and demanded accountability for sexual violence or harassment. Furkan Latif Khan, India's #MeToo Movement, One Year On, NPR (July 29, 2019). Similar #MeToo movements began in many other countries, including Morocco, Egypt, China, Senegal, and Austria, to name a few. Meighan Stone, Rachel Vogelstein, Celebrating #MeToo's Global Impact, FOREIGN POLICY (Mar. 7, 2019).

As the #MeToo movement has continued to take flight around the globe, it has also impacted workplaces worldwide. Among the impacts of the #MeToo movement on different facets of life, companies have shifted to:

  • Focusing on issues of workplace harassment by adding anti-harassment policies to corporate codes of conduct
  • Establishing new procedures for addressing allegations –and–
  • Enhancing employee training on topics including sexual harassment and corporate culture

David A. Katz, Laura A. McIntosh, Corporate Governance Update: Shareholder Activism Is the Next Phase of #MeToo, HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE (Sept. 28, 2018).

Current Landscape of Gender Diversity on Corporate Boards

The #MeToo movement has also impacted the composition of corporate boards. As many as 17 states exceeded having 20% women directors by 2019, compared to just 4% in 2018, and 1% in 2017. 2020 Women on Boards Gender Diversity Index (2020) (last visited Feb. 22, 2021).

Female representation among new S&P 500 directors more than doubled in the last decade, increasing from 21% in 2010 to 47% in 2020. In 2020, 28% of all directors were women, compared to 16% of all directors in 2010. Julie Daum, Lauren McCarthy, Ann Yerger, Key Takeaways—2020 Board Index, HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE (Jan. 26, 2021). In 2021, 36% of S&P 500 boards had three female directors and another 36%—compared with 28% in 2020—had four or more. 2020 U.S. Spencer Stuart Board Index, Spencer Stuart (2020).

This increasing rate of new female directors has been consistent across market segments. Subodh Mishra, U.S. Board Diversity Trends in 2019, HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE (June 18, 2019).

Due to efforts to increase the placement of women on boards, the number of women directors worldwide continues to grow at a fast rate. In 2017, Russell 1000 company boards were 19.6% women, followed by 21.3% women in 2018, and 24.3% women in 2019. In 2020, more than one-third (38.5%) of boards around the world had at least three women, up from 36.2% in 2019. Milhomem, C. (2020), Women on boards: 2020 progress report, MSCI.

Despite this increase in the number of women directors worldwide, there remains much room for improvement. Only 3% of all women directors currently hold leadership roles, while 14% of all male directors hold leadership roles, making it 4.67 times more likely for men to serve as a board leader or board chair than women. The average female committee member has held 1.08 committee chair roles over her career, whereas the average male committee member has held 1.24. A Few Good Women Gender Inclusion in Public Company Board Leadership, DILIGENT INSTITUTE (2020).

For guidance on ESG, MeToo, and Black Lives Matter corporate governance issues, see ESG, MeToo, and Black Lives Matter: Key Corporate Governance and Workplace Issues.

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