Board diversity in U.S. businesses has evolved significantly in recent years, driven by policy changes, legal developments, and shifting corporate priorities. While progress has been made, particularly in gender representation, recent trends indicate a more complex and nuanced landscape in achieving and maintaining diversity within corporate leadership.
Over the past decade, corporate boards in the United States have made notable strides in enhancing gender diversity. Between 2018 and 2023, the percentage of female directors in the S&P 500 increased from 23% to 32%, while the Russell 3000 index saw female board representation rise from 18% to 28% during the same period. However, progress has slowed in certain areas. From 2022 to 2024, the share of new Russell 3000 directors who are non-White declined from 48% to 31%, with Black directors decreasing from 26% to 12%. Additionally, while women now hold a record 29% of overall board seats, they occupy only 8% of board chair positions.
The recent shift away from diversity, equity, and inclusion (DEI) initiatives can be attributed to evolving policy changes and legal rulings. In December 2024, a federal appeals court blocked Nasdaq rules that required public companies to have at least one woman, person of color, or LGBTQ+ member on their boards. In January 2025, President Donald Trump signed an executive order eliminating diversity programs across the federal government and placing federal DEI staffers on leave while their departments were dismantled. These policy shifts have influenced corporate responses, with major institutional investors such as BlackRock, Vanguard, and State Street removing specific numerical diversity targets for board composition.
Many corporations have adjusted their approach to DEI in response to policy changes. Some have reframed their DEI initiatives under different terminologies. For example, Victoria’s Secret renamed its “diversity, equity, and inclusion” team to “inclusion and belonging,” Disney shifted its “Diversity & Inclusion” performance metric to “Talent Strategy,” and McDonald’s rebranded its DEI team as the “Global Inclusion Team”. Additionally, companies across various industries, including Salesforce, Amazon, Google, and Meta, have scaled back their DEI programs. Pharmaceutical firms such as Novartis and Roche have also adjusted their diversity strategies in response to new U.S. executive orders, with Roche citing the need to ensure continued delivery of medicines and diagnostic solutions to patients.
Despite these shifts, Goldman Sachs, McKinsey & Co. and BlackRock, to name a few, say the companies with diverse boards do 20-40% better, hence many corporations remain committed to diversity. Starbucks’ CEO, Brian Niccol, recently reaffirmed the company’s commitment to DEI, emphasizing its importance in strengthening the business. Furthermore, board diversity extends beyond gender and racial representation to include individuals with diverse industry experiences, non-traditional career paths, and varied cultural perspectives. Some boards are emphasizing “cognitive diversity,” which prioritizes varied perspectives over demographic targets, fostering innovation and more comprehensive decision-making.
While U.S. corporate boards have made significant progress in gender diversity, the advancement of racial and ethnic diversity has slowed, and many companies are scaling back DEI initiatives. However, the definition of diversity continues to evolve, with a growing focus on diverse perspectives and expertise. As corporate governance adapts to legal and policy changes, the role of board diversity in fostering innovation and improving decision-making remains a critical consideration for businesses moving forward.
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