| A record share of Fortune 500 board seats (43%) were filled by first-time directors in 2021, according to an analysis of board composition trends by Heidrick & Struggles. |
In 2021, boards of companies in the Fortune 500 continued a trend that began in the second half of 2020: bringing in an infusion of fresh thinking by reaching out to groups of people from increasingly diverse backgrounds.
Over the past few years, we have experienced an unprecedented series of events that have fundamentally changed both our communities and our organizations, from the COVID-19 pandemic to racial and social justice movements, increased polarization, the sharpened focus on climate change, and recent geopolitical events such as the war in Ukraine. One outcome of these experiences has been a greater focus on purpose, both individual and organizational. It’s undeniable that all these events, taken together, have changed the very nature of corporations’ license to operate—the fundamental contract between organizations and the communities within which they do business.
This change not only affects how companies conduct their business but also, on a deeper level, leaders and organizations increasingly find themselves pressured by some stakeholders to take public stands or speak out on issues that had previously been considered outside of the scope of corporate leaders or corporations. As such, they are increasingly looking to directors with diverse experiences and expertise to provide insight and help them navigate this ever-changing landscape. The war in Ukraine is a clear example of this expectation; companies have been pressured by a range of stakeholders to sacrifice their profit and operations for a greater good. Even more universal, there is the expectation—which is to become a regulatory requirement in more countries—that companies act in a sustainable manner across a range of issues.
In this report, we look at the new directors added to Fortune 500 boards in 2021. We can see how much these boards are moving the dial on changing their composition to address these new expectations.
Boards have continued a trend that began in the second half of 2020: bringing in an infusion of fresh thinking by reaching out to groups of people from increasingly more diverse backgrounds. The changes of 2021 were mostly incremental but generally positive.
So, while there has been progress in broadening the spectrum of experience around boardroom tables in Fortune 500 companies, most boards will need to continue to think more strategically, holistically, and continuously about refreshment to make sure they not only are prepared for today’s challenges but also have the resilience to respond to future unexpected ones.