Matteo Tonello is Managing Director of ESG Research at The Conference Board, Inc. and Paul Hodgson is Senior Advisor to ESGAUGE. This post relates to Corporate Board Practices in the Russell 3000, S&P 500, and S&P MidCap 400: 2021 Edition, an annual benchmarking study and online dashboard published by The Conference Board and ESG data analytics firm ESGAUGE, in collaboration with Debevoise & Plimpton, the KPMG Board Leadership Center, Russell Reynolds Associates, and The John L. Weinberg Center for Corporate Governance at the University of Delaware.
Corporate Board Practices in the Russell 3000, S&P 500, and S&P MidCap 400: 2021 Edition documents corporate governance trends and developments at US publicly traded companies—including information on board composition and diversity, the profile and skill sets of directors, and policies on their election, removal, and retirement. The analysis is based on recently filed proxy statements and complemented by the review of organizational documents (including articles of incorporation, bylaws, corporate governance principles, board committee charters, and other corporate policies made available in the Investor Relations section of companies’ websites).
The project is conducted by The Conference Board and ESG data analytics firm ESGAUGE, in collaboration with Debevoise & Plimpton, the KPMG Board Leadership Center, Russell Reynolds Associates, and the John L. Weinberg Center for Corporate Governance at the University of Delaware.
The following are the key findings and insights.
For the first time in our annual analysis of proxy statements, in 2021 the majority of S&P 500 companies have disclosed the racial (ethnic) makeup of their boards. According to the disclosure available, boards remain overwhelmingly white, with some business sectors disclosing far more racial diversity than others. This is also true for newly elected directors for which demographic information is made public—less than one-fourth of them are non-white. Companies should consider committing to a multi-year board succession plan where the search for strategic skills and expertise is accompanied by a sustained focus on diversity. They should also investigate best practices on the integration of diversity, equity, and inclusion (DEI) metrics into senior executives’ incentive plans, and continue to improve disclosure of board racial and ethnic diversity.
