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Large companies hired fewer board members in 2022, but chose more candidates with experience as a CFO or a similar executive-level position—and those over the age of 60—rather than first-time directors, women, or racially or ethnically diverse candidates, according to a new report from executive search firm Heidrick and Struggles.
Board appointments at Fortune 500 companies overall saw a slight decline last year, with fewer board members appointed in 2022 than in the previous four years. However, the decline was most marked among underrepresented groups, with fewer women and people from racial and ethnic minorities being appointed to boards than in 2021.
The 2022 decline comes after significant increases in Black board member appointments in 2020 and 2021. During those years, many companies made public diversity commitments after the murder of George Floyd, according to Heidrick and Struggles. The report also said the percentage of Black board members in 2022 is still higher than in any of the previous 11 years leading up to 2020.
Representation of Hispanic and Asian board members has remained “flat over the last four years,” with Hispanic and Asian women particularly underrepresented, according to the report. Appointment of women candidates to boards fell by 5% in 2022.
Safe and familiar? Companies did turn to experienced executives in 2022, with boards appointing more members with experience as CFOs and CEOs than in previous years. First-time directors accounted for 32% of seats in 2022, compared to 43% in 2021. The number of candidates who are active in executive roles remained stable, at 62%.
Candidates with CFO experience captured a total of 18% of seats, compared to 14% in 2021. Having experience as a CEO was an even greater boost, the report said. CEO candidates accounted for 43% of all board seats in 2022, compared to 40% in 2022.
The report also notes that candidates with experience in cybersecurity, international backgrounds and cybersecurity were also popular picks. More than half of directors (57%)reported international experience, 14% reported cybersecurity experience and a quarter reported experience with a sustainability committee.—LR/DA