2020 was a transformational year for BoardReady. We built a comprehensive technology platform that leverages data to benchmark, improve, and measure the impact of board diversity. The data that we’ve compiled on board diversity is offering insight into several patterns in board diversity that will help us with our analysis in the coming year. All of our data comes from publicly available data sources on the S&P 500.

The BRI score is at the core of our data-driven thought leadership. The score enables us to standardize board diversity metrics across companies and is computed based on the gender, race, age, and tenure of the board directors. The above chart shows the distribution of BRI scores across the S&P 500. Unlike golf, higher scores are better. Roughly 44% of S&P 500 companies have BRI Scores above 80 which is positive; however, best-in-class diversified boards sit at a score of 90 or above.

As we think about the progress to be made, these charts track the diversity of S&P 500 companies by gender and race. They reflect the recent gains that women have made in the boardroom over the last decade in comparison to the more moderate gains by people of color. 77% of companies have 20% or more of their board seats filled by women. People of color still see fairly low representation on most boards, holding 20% of board seats or less at 58% of companies.

When we look at the sectors with the shortest median tenure, we see a strong correlation between sectors with short board tenure and sectors with more women on their boards. This correlation makes sense as higher board turnover (due to shorter tenure) means more opportunities for boards to add diverse directors. This data confirms research suggesting that reasonable board turnover is a key feature in improving board diversity.

Analyzing revenue, we see that companies with BRI scores of 90 and above have more than 1.5x the average revenue of companies with BRI scores under 70.

Meanwhile, looking at gender diversity specifically, companies with 40-50% women directors also enjoyed more than 3x the average net income of companies with less than 20%.

These charts are preliminary and a relatively small data set, but they help support the argument that we’ve been making for years: Diversity Pays. In order to track board diversity in the wider market, we will be expanding our data sets beyond the S&P 500 and sharing those results soon.

The BRI platform will allow us to track this data year-on-year and show even stronger correlations as the data set continues to grow. We look forward to exploring this data in the coming year, and are eager to use it to help corporate boards advance their own board diversity initiatives.

If you’re interested in learning more about BoardReady’s BRI initiative, calculating your BRI score, or discussing this data further,  contact us here.

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