Heidrick&Struggles analyses Fortune 500 board appointments

Heidrick & Struggles is the premier provider of executive search, corporate culture and leadership consulting services. The firm works for more than 70% of Fortune 1000 companies in virtually every sector and industry around the world. 

For all of the services offered, Heidrick & Struggles employ data-driven methodologies honed through decades of relationships and engagements with the world's largest organisations.  Our expertise enables our clients to find the world's best leaders, create diverse and inclusive cultures, and transform their teams to achieve the highest levels of profitability and performance.

Appointments to Fortune 500 boards in 2023

Heidrick & Struggles has released its analysis of the appointments to Fortune 500 boards in the first six months of 2023, reporting a renewed focus on diversity and an encouraging uptick in the share of seats going to first-time directors.

The firm’s earlier analysis of the 2022 board appointments at Fortune 500 companies showed that progress had slowed down on key diversity metrics from the prior year, including the share of seats going to first-time directors, women, and directors from diverse ethnicities. It showed an increase in the share of seats going to directors with more traditional CEO, CFO, or prior public company board experience, as well as directors over the age of 60.

In the first half of 2023, it reports an overall decrease in the number of appointments but an encouraging uptick in the share of seats going to first-time directors, women, and directors from diverse ethnicities. The firm also reports continued interest in directors with C-suite experience other than the two traditional top roles, CEO and CFO.

Gender and racial and ethnic diversity

The change in 2022 appointments to the first half of 2023 aligns with longer-term trends on gender. 

In most six-month periods since January 2019, 40% or more of the seats went to women; when there has been a drop, it has been followed by a quick rise.  

The trends are not so consistent when it comes to racial and ethnic representation. The high shares of Black directors appointed immediately after the murder of George Floyd in 2020, have settled back to just slightly above their historical levels of about 11%. 

Ethnic representation in the first half of 2023 has grown due to a rise in the share of appointments of Asian and Asian American directors as they hit 14%, the highest that Heidrick & Struggles has reported.

Heidrick & Struggles reports that sectors seem to focus on one of the two dimensions of demographic diversity at a time:

• Financial services and technology and services companies appointed women to a significantly lower share of seats compared to 2022, but appointed a significantly higher share of ethnically or racially diverse directors
• Healthcare and life sciences companies showed a small increase in the share of seats going to women and a more significant decrease in ethnic diversity

Industrial is the only sector that has seen a significant improvement in both, which is encouraging given that they were trailing behind the other industries on both dimensions of diversity.

Professional backgrounds  

Heidrick & Struggles believes that the uncertainty of the economic outlook and the lingering threat of recession has had an impact on the board appointments. 

In the first half of 2023, the firm reports a decrease in the share of seats going to directors with CEO experience, and a significant increase of appointments going to directors with CFO experience—matching the high of 23% in the second half of 2019. 

The share of seats going to directors with other C-suite experience (mostly non-operational roles) remained steady at 30%.

Heidrick & Struggles also saw a small increase in the share of seats going to first-time directors in the first half of the year, another sign that boards are once again opening their searches to directors who bring different experiences to the table.

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