Starbucks, Microsoft And Amazon Support The Black Boardroom Wave
By CultureBanx Team
- Microsoft, Starbucks and Amazon will sponsor the Black Board Initiative to get get 1 in 8 Black board members at S&P 500 companies by 2028
- 145 S&P 500 companies have appointed at least one Black director to their board since last June
Some of the world’s biggest companies are attempting to make their corporate boards a little more woke by addressing the critical equity and corporate governance issue through the Black Boardroom Initiative (BBI). One-hundred forty-five S&P 500 companies have appointed at least one Black director to their board since last June, according to Latino Corporate Directors Association. The BBI aims to increase the ratio of Black executives sitting on S&P 500 corporate boards to one in eight by 2028. Zillow (Z +0.34%), Microsoft (MSFT +2.07%), Starbucks (SBUX +0.78%) and Amazon (AMZN +0.60%) will sponsor the BBI, though many are still left wondering whether or not corporate America’s top companies are finally turning the corner in diversifying their boards?
Why This Matters: The call for diversification in corporate America is as pronounced as ever. There’s research showing the many benefits of diversity in thought among corporate leadership. Research from McKinsey and MSCI shows companies with higher levels of diversity at the board level are more likely to have strong financial performance and fewer instances of poor corporate governance.
A concerning development is there isn’t a consensus across boardrooms on the value-add of diversity. A PwC survey of 900 board directors found 24% of directors don’t believe racial diversity has an impact on diversity of thought within boardrooms.
There are institutions like the Nasdaq that are challenging the status quo by requiring its listed companies to make their boardrooms more diverse. They filed a request with the Securities and Exchange Commission seeking the authority to mandate that companies have at least two diverse board members.
A report by Heidrick & Struggles projects that by 2022, appointments of women to board positions will reach 50% among the incoming class of new board members. While board appointments in the U.S. for people of color have also increased, unfortunately, 50% of new board members were current or former CEOs.
Board diversity has a long way to go because the reality is that 50% of new board members are former CEOs, along with 21% being current or former CFOs in 2019, according to the report. If people of color aren’t reaching the CEO or CFO level, how can they join boards?
What’s Next: Currently, Amazon does not have a Black person serving on its board of directors, after Rosalind Brewer stepped down to become the CEO of Walgreens. Microsoft, Starbucks and Zillow all have one Black board member. The BBI is now working to identify candidates to participate in a six month training and networking program to reach its 2028 goal.
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