A new report by The Conference Board reveals that, as boards seek to recruit more directors with functional expertise, the percentage of board members in the Russell 3000 with business strategy experience has declined by five percentage points, from 67.7 percent to 62.9 percent. Accompanying that worrisome decline is a drop in directors with international experience, despite a more interconnected and tumultuous world.

At the same time, The Conference Board report, featuring data from analytics firm ESGAUGE, also reveals significant increases in the disclosure of diversity on boards. The percentage of S&P 500 companies disclosing directors' sexual orientation has more than tripled, from under seven percent in 2021 to nearly 23 percent as of April 2022, and in the Russell 3000 it increased seven-fold, from 3.5 percent to 25.4 percent. 

While 58.8 percent of the S&P 500 disclosed the racial/ethnic diversity of their boards in 2021, 73.3 percent have done so thus far in 2022. Similarly, in the Russell 3000, the share of companies disclosing the racial/ethnic diversity of their boards rose from 27.7 percent in 2021 to 45.1 percent as of April 2022.

But the increase in disclosure has not been matched by increases in racial/ethnic diversity. While the percentage of non-White directors has increased in the S&P 500, it has stalled among the Russell 3000. By contrast, gender diversity has continued to increase, with women now representing over 30 percent of directors at S&P 500 companies, and over 25 percent of board members at Russell 3000 companies.