2020 Update of the Diverse Board

Our original NACD Blue Ribbon Commission report was written in 2012 with the hopes of its recommendations quickly becoming obsolete. Although progress has been made to diversify the composition of the American boardroom, the report’s ultimate aspiration has yet to be fully achieved. Recent developments have reinforced the importance of board diversity as a business and societal imperative. The pandemic and widespread protests in the pursuit of racial justice have underlined the significance of building diverse and inclusive boards that can help their organizations to navigate through crisis and drive stronger interconnectedness between companies and the world in which they operate. The demands of this new environment compelled us to refresh our 2012 guidance and issue a new iteration of our mandate on board diversity.

Environmental, social, and governance (ESG) concerns have grown in importance in recent years. Societal pressures, investor expectations, and stakeholder attention have aligned to bring board oversight of diversity to the forefront of conversations on the S of ESG. Recent legislation and regulations on human capital and diversity have created new standards, with many more expected in the next few years. It is imperative, then, that directors consider how their own composition aligns with the gender, racial, and ethnic makeup of their management teams, workforce, and customers. The demand and expectation for diversity on boards will only continue to grow.