Diverse Corporate Leadership
Improving gender and racial and ethnic representation among corporate leaders and boards of directors has become an important goal for firms, shareholders, and other stakeholders.
Beginning in 2020, Illinois corporations have been required to file annual reports on the demographic composition of their boards of directors and report on their policies and practices for promoting diversity, equity, and inclusion among directors and executive leadership. The Illinois Corporate Board Diversity Report – 2020 is produced by LER Professors Richard Benton and Eunmi Mun and summarizes the data found in the 2020 diversity and inclusion filings.
This report analyzes aggregate female and racial and ethnic minority board representation, identifies promising policies and practices that may improve board representation, and presents individualized firm-rankings on gender and racial/ethnic representation.
Although a handful of firms are leading the way in terms of board diversity, there is still wide variation as many firms maintain unrepresentative boards. According to this analysis, 67 percent of Illinois corporations have two or more female directors while only 35 percent of them have two or more non-white directors. Women’s board representation, despite gains, still falls short of their overall representation in the workforce.
Racial and ethnic representation is more nuanced, with Black and Hispanic or Latino directors being particularly underrepresented. Looking to the practices of leading firms may prove instructional about the kinds of policy changes that can help improve board diversity and inclusion among Illinois firms. Successful firms affirm a positive and specific commitment to race and gender diversity, emphasize this commitment across the organizational culture, and build it into substantive processes for board appointments and executive officer hiring.