In response to the racial reckoning sparked by the police killings of George Floyd, Breonna Taylor and other unarmed Black men and women during the summer of 2020, many corporations publicly expressed their commitment to not only grapple with racial inequities in the economic sphere, but also increase racial diversity on their board, with particular emphasis on Black directors. Most notably, on September 9, 2020, The Board Challenge (founded by business leaders with at least one Black director) launched an initiative encouraging every U.S. company to sign a pledge agreeing to appoint at least one Black director to their board within the next twelve months. As a result, several companies have committed to adding a Black director within the year.
The racial reckoning of the 2020 summer also spurred the adoption of new board diversity regulations. California became the first state in the country to require publicly held corporations in California to have a minimum number of directors from an “underrepresented community” on their board. The law defines a “director from an underrepresented community” as “an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.” Additionally, Nasdaq recently adopted new listing rules requiring all Nasdaq listed companies to publicly disclose diversity statistics regarding their board, and requiring such companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as LGBTQ or an underrepresented minority, defined similarly to the California law.
Embedded in these commitments and regulations is animplicit presumption that board diversity advances the call to promote racial equity in the economic sphere, particularly with respect to Black people. Confirming this presumption, one supporter of Nasdaq’s proposal proclaimed that Nasdaq was “heeding the call of the moment.” This essay examines this presumption and argues that board diversity is a necessary though far from sufficient component of the movement to achieve racial equity in the economic sphere. This essay then argues that, notwithstanding promising momentum, there remain several significant roadblocks to achieving meaningful progress related to board diversity. Importantly, this essay argues that many of these roadblocks involve racial bias that is implicit but too often unchallenged, and hence insists that these roadblocks will remain unless there is intentional reckoning with this bias.
board diversity, racial diversity, board challenge
Cornell Law Review Online
106 Cornell L. Rev. Online 68 (2021).