Today’s boards face an increasingly complex business environment, an intensifying regulatory environment and growing activism by investors and other stakeholders. In response, they are focusing on their own composition and taking a strategic approach to director appointments. Highlights from the 2023 S&P 500 New Director & Diversity Snapshot include:
Financial expertise and CEOs are in demand
Active and retired executives with CEO experience are in demand, with appointments returning to 2018 levels and reversing several years of decline. 30% of new directors appointed in 2023 are active or retired CEOs and 27% have a financial background.
Diversity continues to be important
67% percent of this year’s class of new directors are diverse, defined by Nasdaq as directors who self-identify as female and/or underrepresented minorities (Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or two or more races or ethnicities), and/or LGBTQ+.
The percentage of women on S&P 500 boards continues to rise
46% of new independent directors are women. This is a 92% increase in 10 years. Female directors now account for 33% of all S&P 500 directors, up one point from last year. This is an 83% increase from a decade ago.
- A larger share of new directors have international experience
S&P 500 boards continue to strengthen their global outlook. Among new independent directors appointed in 2023, 54% have spent time working at an international location —
a four-point increase from last year.
The proportion of next-generation directors has declined
The proportion of next-gen new directors (those aged 50 or under) has dropped more than a third. They account for 11% of the incoming class of 2023, down from 18% in 2022.