The number of Black CEOs in the Fortune 500 is at an all-time high…of six, just a little more than 1% of America’s top companies.
Never has a record seemed so sad and motivating, all at the same time. And that’s just the tip of the iceberg for Fortune 500 minority CEOs. A recent Fortune 500 diversity survey discovered only 38 percent of Fortune 500 board seats went to women or people of color.
Why does this matter? For starters, Fortune 500 companies (America’s 500 largest companies by revenue) make up some two-thirds of the U.S. economy, totaling to about $13.8 trillion in revenue in 2022. An overview of Fortune 500 diversity offers a snapshot of how diversity efforts are playing out at some of America’s most influential companies. From here, we can see some of the progress that’s been made toward diversity, equity, and inclusion overall, and the ground we have left to cover.
Let’s get started.
Fortune 500 CEOs by race and gender
Fortune 500 minority CEOs and board members
The 2021 Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 boards—a survey conducted by the Alliance for Board Diversity and Deloitte—offers a Fortune 500 diversity deep dive.
In all, the census report uncovered that 17.5% of board seats were occupied by Fortune 500 minority CEOs. More specifically, 11.8% of board seats in 2020 went to minority men, and 5.7% went to minority women.
The number of Black CEOs is at an all-time high, per the 2022 Fortune 500 rankings, totaling to six Black chief executives (just over 1% of the companies in the list). The 2022 rankings include the first time a Black founder has ever been featured in the Fortune 500’s 68-year history. And it’s the second year two Black women have been at the helm of Fortune 500 companies.
“To be sure, any increase in Black CEO representation is cause for celebration given the Fortune 500’s predominantly white and male history,” according to Fortune. “But there’s still a sizable parity chasm. Consider this: If the CEO makeup of the Fortune 500 was reflective of U.S. demographics, there would be more than 65 Black CEOs (13.5%) leading America’s largest public companies, compared to the current state of around 1.2%.”
Women in the Fortune 500
Fortune 500 diversity for women is also at a record high. But 44 female CEOs in the ranks of the country’s 500 largest companies demonstrates there’s still work to be done.
Women have made “steady progress,” according to Lorraine Hariton, President and CEO of Catalyst, a nonprofit focused on women’s leadership. “But it’s nowhere near the speed we’d like it to be.”
“With 44 female chief executives spearheading America's largest companies, women now run 8.8% of businesses on the 2022 list,” per reporting from Fortune. “That's up from 8.2% last year, when women led 41 of the 500 companies, and six times their share two decades ago, when women led just seven Fortune 500 businesses.”
The 2021 Missing Pieces Report took an even more granular look at Fortune 500 diversity.
For instance, The Missing Pieces Report found that AAPI women had the largest percentage increase in Fortune 500 board seats, totaling to a 45.9% increase (28 seats gained). Hispanic/Latina women made the second largest leap at 31.1% increase (14 seats gained).
Across all demographics, women made gains at Fortune 500 boardrooms, according to the report. But there’s still work to be done.
“For every board seat newly occupied by a minority woman, White women occupied nearly three new seats,” the report stated. “While the laudable goal of gender diversity has made substantial progress, it appears to be coming at the expense of a broader set of minority boardroom candidates.”
The “overreliance” of Fortune 500 minority CEOs
Two out five Black board members serve on multiple Fortune 500 boards, according to the research. This phenomenon is known as the “overreliance” on the same diverse executives across different boardrooms or “recycle rates.”
Why do recycle rates matter? Decreased “recycle rates” are often “healthy” signs pointing to a board that’s becoming “more open and independent in nature,” per the diversity census. Plus, it means companies aren’t over reliant on the few Fortune 500 minority CEOs within their ranks.
“If corporations are serious about achieving true board diversity, they must be intentional about reaching outside of their traditional networks and tapping the plethora of qualified, Black board-ready executives who are ready to serve,” Michael C. Hyter, President and CEO of The Executive Leadership Council, said in the report.
The Fortune 500 diversity problem requires further analysis and data
Last year’s Fortune 500 analysis included a new metric referred to as Measure Up, a rank of “the most progressive companies in diversity and inclusion.” (The Measure Up project remains ongoing, and the figures presented in this article reflect the latest available data.)
To quantify diversity and inclusion, Measure Up looked at 14 key metrics, such as salary gaps by race and gender, the number of female employees and managers, and the percentage of minority employees, managers, and board members.
Ultimately, The Measure Up data reveals just one of the many hurdles to overcoming the lack of Fortune 500 diversity—data. While 356 of the Fortune 500 had some publicly-available racial and ethnic data in 2021, only 22 companies “published a full breakdown of the percentage of minorities in their companies.” Data and transparency go hand in hand; once we know where we are, we can more effectively set a strategy to grow.
Join AboveBoard to promote diversity in the Fortune 500 and beyond
We’ve reviewed Fortune 500 CEOs by race and gender given the best available data, and here’s the big takeaway: change is happening, albeit slowly.
At AboveBoard, we’re on a mission to be the change we want to see. Our innovative platform for executive hiring connects underrepresented executive candidates, including Black, Latinx/Hispanic, and female executives, directly with the C-suite and boardroom opportunities that will take their careers to the next level.
Change starts at the top, and the data bears this out. According to Deloitte and the Alliance for Board Diversity's census, "placing women and minorities into the positions of board chair and nominating or governance chair can pay immediate and future dividends for the promotion of board diversity.” What are you waiting for?