Board diversity disclosures

Almost all S&P 500 companies (98%) disclose the racial/ethnic diversity of the board in some form, compared to 85% of Russell 3000 companies. Half of Russell 3000 companies are listed on the Nasdaq stock exchange and subject to Nasdaq’s Board Diversity Rule; this is likely why a greater percentage of Russell 3000 companies than S&P 500 companies disclose the number/percentage of directors identifying with each racial/ethnic category.

Twenty-nine percent of the S&P 500 and 40% of the Russell 3000 disclose the LGBTQ status of the board in some form; this includes those companies disclosing that they have no directors self-identifying as LGBTQ. Russell 3000 companies are more likely to disclose the LGBTQ status of directors in the aggregate, which is also likely a result of the Nasdaq Board Diversity Rule.

Since 2009, the US Securities and Exchange Commission has required public companies to describe if and how they incorporate diversity into director search criteria. All S&P 500 companies and 99% of Russell 3000 companies reference diversity generally in their search criteria. Additionally, 93% of S&P 500 companies and 79% of Russell 3000 companies specifically include a reference to gender diversity. Nearly the same percentage of companies include a reference to racial/ethnic diversity, while far fewer include a reference to diversity of sexual orientation.

Seventy-two percent of S&P 500 companies and 70% of Russell 3000 companies disclose their directors’ self-identified racial categories (by name or number/percentage identifying with that racial/ethnic category). The percentage of board seats disclosed as held by LGBTQ directors is at 1% in both indices. When considering the use of pronouns used in disclosures, women hold 34% of S&P 500 board seats and 30% of Russell 3000 board seats.