Dive Brief:
- In a push to improve focus on diversity in the C-suite, the Latino Corporate Directors Association (LCDA) launched The Latino Board Tracker Feb. 20 to track of the number of Latino board directors at Fortune 1000 (F1000) companies.
- Users can search by F1000 rank, company name, location, and the number of Latinos on each board. The tracker currently showed that 25% of F1000 companies have at least one Latino person on their boards, and 32 of those received a gold star designation for having two or more Latinos, LCDA said in a statement.
- LCDA is comprised of U.S. Latinos that serve on publicly traded or large privately held company boards, as well as C-level aspiring directors. Esther Aguilera, CEO of the association, said, in a statement, that the "tool is a baseline; it is our hope that boards and directors will surface with additional information about current board composition that will enable the most accurate data available."
Dive Insight:
Various studies have shown that the business case for diversity in the boardroom is an increase in profitability and enhancement of a company's culture. But company boards are not required to publicly report on the race and ethnicity of members.
The "Improving Corporate Governance Through Diversity Act of 2019," which was passed by the U.S. House of Representatives in November, would require public companies to annually disclose the voluntarily self-identified gender, race, ethnicity and veteran status of their board of directors, nominees and senior executive officers. The bill is pending a vote in the Senate. Meanwhile, the House Financial Services Committee released the report, Diversity and Inclusion: Holding America's Large Banks Accountable, Feb. 12. It found banks' board of director seats continue to be filled predominantly by white men.
Taking a look at Fortune 100 and 500 companies, the "Missing Pieces Report" tracked the percentage of women and people of color on corporate boards. In 2018, Latinos accounted for 4.4% of the total board seats at Fortune 100 companies — 54 members total — compared to 984 or 80.5% white men and women. At Fortune 500 companies, there were 213 Latino directors (3.8%), and 4,758 white men and women directors (83.9%). The study, published by the Alliance for Board Diversity (ABD) in collaboration with Deloitte, "provides powerful metrics on the slow change of diversity in the boardroom," the authors stated.
The change is slow and according to PwC's 2019 Annual Corporate Directors Survey, diversity and inclusion on the board still lagged behind cybersecurity and shareholder engagement as director priorities. Directors' interest in gender diversity actually declined from 46% in 2018 to 38% in 2019, according to the report, while interest in racial or ethnic diversity increased from 34% in 2018 to 38% in 2019. The report also found that directors surveyed, including women, don't agree with laws that mandate that at least one woman director serve on a company board, such as California's 2018 Women on Boards (Senate Bill 826).
