WSJ News Exclusive | This Year’s Influx of Directors Starts Shift in Boardroom Diversity

S&P 500 boards added 456 new independent directors—those without strong ties to management—over the past year, many this spring, the highest number since 2004, according to an analysis of corporate proxy filings from Spencer Stuart, an executive and board recruiting firm.

Nearly three-quarters of the new directors are women or belong to a racial or ethnic minority, up from about 60% last year and 31% a decade ago. A third of the total are Black, up from 11% last year, and 7% are Latino, up from 3%.

S&P 500 companies adding one or more Black board members in the past year include insurer

Allstate Corp.

ALL 0.86%

, retail giant

Target Corp.

TGT -0.21%

and automotive supplier

BorgWarner Inc.

BWA 0.23%

Darren Walker, who sits on the boards of

PepsiCo Inc.,

PEP 0.01%

Square Inc. and

Ralph Lauren Corp.

RL 0.77%

, told those companies last year that having one Black director like him wasn’t enough.

“It’s up to those of us who make it into the room to not simply shut the door behind us but to open it even wider,” said Mr. Walker, who is president of the Ford Foundation. “If we limit these seats, that’s not true diversity, that’s tokenism.”

Diversity “is being discussed in a way it never was before,” he said. “And without people like me in the room, it wouldn’t be discussed this way.”

PepsiCo had such an appointment in the works already, Mr. Walker said:

Segun Agbaje,

a Nigerian bank CEO, who joined the soda giant’s board last July. In October, Ralph Lauren named former Obama adviser

Valerie Jarrett

as a director. Last month, rapper and music executive Jay-Z joined Square’s board after it bought a majority stake in his streaming startup Tidal.

BorgWarner said it has refreshed its board over the past three years, reducing tenure and increasing diversity of skills, background and experience. Square’s board included a Black director until shortly before Mr. Walker joined in June 2020 and had two as recently as 2016. Ralph Lauren had been working to add Ms. Jarrett to the board since 2019, a person familiar with the matter said.

Target said it adds directors as it finds opportunities to expand board expertise and viewpoints. Allstate said the director it added in October was chosen for his financial and operational expertise.

The broader change flowed from public attention on racial disparity in the wake of the police killing of George Floyd last year and the subsequent Black Lives Matters protests around the country, said

Julie Hembrock Daum,

head of Spencer Stuart’s North American board practice.

Institutional investors and policy makers have also pushed boards to become more diverse. In December,

Nasdaq Inc.

NDAQ 0.65%

proposed requiring most U.S. listed companies to include at least one woman on their boards in addition to a director who is a racial minority or self-identifies as lesbian, gay, bisexual, transgender or queer. A similar board-diversity mandate passed in California last year.

A group of Republican senators have opposed the Nasdaq proposal, saying it would hurt boards’ ability to govern in the best interests of shareholders. The head of the National Urban League said the proposal minimizes opportunities for Blacks by making Black and LGBTQ directors interchangeable to meet the requirement.

Not every underrepresented group saw increases among new directors this year. Those of Asian descent accounted for about 7% of new nominees, down slightly from last year, and women made up 43% of new board members, down from 47% in 2020, the study found.

About 11% of all directors on S&P 500 boards are Black, 30% are women, 4% are Latino and 6% are Asian, Spencer Stuart said. Two are American Indian or Native Alaskan, and less than 1% belong to multiple racial groups.

All those figures trail the groups’ representation in the U.S. adult population, in recent U.S. census estimates, except for directors of Asian descent.

Typically, new directors are named as predecessors retire; many boards require directors to step down in their 70s. But this year’s increases weren’t driven by a rise in turnover, Ms. Daum said. A number of boards—including Square and Ralph Lauren—added seats, in many cases increasing diversity without waiting for openings from retirement.

Ordinarily, “you just don’t see a lot of new directors coming in,” Ms. Daum said. Companies “don’t get to design the board that they need today. They need to tweak the board that they have slowly.”

Write to Theo Francis at [email protected] and Jennifer Maloney at [email protected]