Washington state will be the testing ground for an ambitious new effort to make corporate boards a little less white.
Formally launched Wednesday, the Black Boardroom Initiative hopes to nearly triple the ratio of Black executives on the boards of major public companies by 2028.
Led by Seattle-based law firm Perkins Coie, and backed by some of Washington’s biggest firms, including Amazon, Microsoft and Starbucks, the initiative is the latest corporate response to call for more balanced leadership at a time of escalating concerns about social justice and racial equity.
“Corporate leaders, shareholders, and employees are looking to … company boards to take meaningful actions against racism and to promote greater diversity within their leadership ranks,” said Bill Malley, managing partner at Perkins Coie, in a statement. “It all starts with the board.”
But greater board diversity can also mean greater economic benefits for companies themselves, said Adriane Brown, who is Black, and a managing partner at Seattle venture-capital firm Flying Fish as well as an outside adviser for the initiative.
Studies show that “diverse teams, diverse groups, diverse boards… generally can deliver better results, better governance, better outcomes” than less diverse ones, said Brown, who was appointed to the American Airlines board earlier this year.
Yet despite some recent progress in increasing board diversity, Brown said, “things are stalled.”
Indeed, while many of the largest public companies have launched high-profile efforts to put more people of color in senior management positions, corporate boards remain remarkable monochromatic, data show.
Just 4.1% of board members at the 3,000 largest publicly held U.S. companies are Black, as of 2019, according to statistics provided by Perkins Coie. And more than a third of 500 of the largest U.S. public firms had no Black board members at all in that year, the firm said.
By contrast, Black Americans are one-eighth of the U.S. population.
Black underrepresentation on corporate boards tends to reinforce itself, Brown said. Although there is no shortage of Black executives with the necessary business experience to serve on boards, she said, lack of prior board experience has historically excluded them from consideration as prospective board candidates.
“A number of boards want experienced board directors,” said Brown, who was appointed to her first board position in 2013, despite many years of senior executive experience. “Well, if I can’t get on my first board, then how can I get on two boards?”
To address that imbalance, initiative organizers want to foster a formal talent “pipeline” that links experienced Black executives with corporate boards that are seeking new members.
At one end of the pipeline, the initiative encourages corporations to notify the initiative organizers about any openings.
At the other end, the initiative helps identify and nurture prospective board candidates.
Prospective candidates are nominated by existing board members or other senior executives to be considered for board openings.
Candidates who meet the program’s criteria — there are currently 23 people on that list — are then admitted to a free training program covering skills, such as corporate governance, widely regarded as essential for board membership.
In addition to skills, the initiative provides Black executives with a formal version of the “insider” networks that have long existed for white executives seeking board membership.
Brown says her own board selection in 2013 — as a director for the Harmon Corporation — came about “only because someone was willing to do the work, and to say, regardless of [me] not being an experienced director, that ‘this is an experienced executive and she is a match for what we are looking for.'”
Although James Williams, managing director of the Seattle office of Perkins Coie, had been considering ways to boost Black board membership for some time, the murder of George Floyd last year “galvanized” him to “get this off the ground,” said spokesperson Justin Cole. Williams, who is Black, collaborated with Stewart Landefeld, a Perkins partner who works closely with corporate boards.
In addition to support from Perkins Coie, co-founders of the Black Boardroom Initiative include Keith Matthews, general counsel of the Bill and Melinda Gates Foundation, Michael Parham, general counsel of RealNetworks, and Patrick Ogawa, managing director of the Seattle office of Deloitte.
The initiative also has support from Deloitte, F5 and Zillow. Its initial focus is Washington state companies, with plans to expand outside the state in the future.
Ines Jurcevic, an assistant professor at the University of Washington Evans School of Public Policy & Governance and an expert in diversity management, said efforts to promote high-level diversity are significant.
Although she hasn’t seen details about the initiative, Jurcevic said that boosting the number of nonwhite board members can be “a really important signal for underrepresented groups” and may be more significant than increasing diversity among lower-level personnel.
“Bringing in diversity on boards signals to marginalized groups that they are valued in the space [and] that they have opportunity to advance in this organization, in a way that wouldn’t be signaled if increased representation was only at low levels of an organization,” she said.
But Jurcevic offered two caveats.
First, company boards need to make sure their objective is a “critical mass” of nonwhite members, and not simply a single “token person of color on the board” whose input can too easily be sidelined.
Second, Jurcevic warns against heavily emphasizing the “bottom-line” argument for more diverse boards.
Although diversity can indeed help companies financially, too much of that emphasis can “put a lot of pressure on [candidates from] marginalized groups to bring in something different and something new” to their board participation, Jurcevic said. “Whereas really, they want to be able to come to work and do their job and do it well.”
Although Black board members are still a rarity at major companies based in Washington state, Mellody Hobson, a Black woman and co-CEO of Ariel Investments, has been on the Starbucks board since 2005. She was recently appointed its board chair, making her the only Black woman to chair a board among the public companies listed on the Standard & Poor 500, according to a March story in The Wall Street Journal. Amazon has been without a Black board member since Roz Brewer, a former Starbucks executive and director, stepped down in February.
This story has been updated to include additional information the creation and sponsorship of the Black Boardroom Initiative.