Spencer Stuart’s U.S. Board Index: Shift to Specialized Leadership and Diversity Milestone in S&P 500 Boards

Spencer Stuart’s 39th annual U.S. Board Index highlights a significant trend in S&P 500 boardrooms, where 59 percent of the 406 new independent directors appointed in 2024 bring chief executive or financial expertise. This shift toward specialized leadership comes amidst an encouraging diversity milestone, with half of all directors now identifying as female, underrepresented minorities, and/or LGBTQ+. Let’s take a closer look!

October 18, 2024 – Spencer Stuart’s 39th annual U.S. Board Index reveals that 59 percent of the 406 new independent directors appointed to S&P boards in 2024 possess chief executive or financial expertise, highlighting a shift towards specialized leadership amid low boardroom turnover. Despite this, the report emphasizes the need for boards to embrace proactive refreshment strategies to stay agile and address evolving business challenges. Spencer Stuart also found that S&P 500 boardrooms reached a new diversity milestone with half of all directors identifying as female, and/or underrepresented minorities and/or LGBTQ+.

“Embracing a courageous and proactive approach to refreshment should be a top priority for all boards,” said Julie Hembrock Daum, co-leader of Spencer Stuart’s North American board and CEO practice. “To remain successful and mitigate risk in today’s rapidly changing landscape, boards must undergo continuous refreshment to welcome a range of skills, experiences, and perspectives that address both the status quo of external influences and the evolving, unique needs of an organization.”

“Agility and adaptability will be key to this refreshment process, as sitting directors will need to strategically navigate uncertainty, identify and seize growth opportunities – and arguably most importantly – have the self-awareness to acknowledge when it’s time to roll off the board and give way to the next generation,” Ms. Hembrock Daum added.

Spencer Stuart found that S&P 500 boards have appointed 406 new independent directors in 2024, out of a total of 5,289. This is a five percent increase from last year. More than half (58 percent) appointed at least one new independent director, up from 53 percent in 2023. And 20 percent appointed more than one new independent director, up from 18 percent in 2023.

Top-Level and Financial Expertise Continues to be in Demand

S&P 500 boards continue to seek top-level executive experience and financial expertise, with CEOs and directors with financial backgrounds comprising 59 percent of the incoming class. Fewer P&L leaders were appointed as directors this year, according to the report. Overall, the class of 2024 has more directors who are actively employed (52 percent) than directors who are retired (48 percent). Last year, there was an even split between active and retired directors.

Spencer Stuart found that the most common industry background for the class of 2024 is technology/telecommunications, accounting for 19 percent of appointments. It was also the most common background in 2023, 2022, 2019 and 2014. The next most common backgrounds for new directors are in the industrials — accounting for 14 percent of appointments — consumer goods and services (13 percent) and financial services (11 percent) sectors. The percentage of new directors with technology/telecommunications backgrounds is higher than the proportion of technology companies in the S&P 500.

The largest sectors in the S&P 500, based on the number of companies, are as follows:

  • 21 percent industrials.
  • 18 percent consumer goods and services.
  • 14 percent financials.
  • 13 percent information technology.
  • 13 percent healthcare.

Next-Generation Directors

The average age of new directors has barely changed, from 58.0 years to 58.2 years. The average age of first-time directors has decreased, from 56.3 years to 55.4 years. In 2024, the oldest new independent director to join a board was 82 years old, the oldest since the U.S. Spencer Stuart Board Index began. In 2023, the oldest new independent director was 74 years old. The proportion of next-gen new directors (those aged 50 or under) has increased after a sharp drop last year. They account for 14 percent of the incoming class of 2024, up from 11 percent in 2023 but below 2022 levels (18 percent).

Spencer Stuart notes that the increase in next-gen directors may be due to growing board interest in tech expertise. Nearly a third (29 percent) of this year’s next-gen new directors have backgrounds in technology/telecommunications, up from 14 percent in 2023. In addition, the majority (89 percent) of next-gen directors are actively/fully employed.

Related: Breaking the Boardroom Glass Ceiling

About a third (34 percent) of the class of 2024 are first-time directors. Directors in this group are much more likely to be actively employed (67 percent) than retired, the report found. They are also much more likely to be actively employed than directors who are not first-time directors (43 percent). Like last year’s findings, a financial background is the most common professional background of new first-time directors: financial executives and CFOs, bankers, investors and accounting executives make up 35 percent of first-time director appointments.

Diversity Efforts Moving Slowly

This year, 58 percent of new director appointments have been filled by diverse executives, down from 67 percent in 2023 and 72 percent in 2022, the Spencer Stuart report found. However, diverse individuals still make up a significantly bigger share of new director appointments than they did a decade ago (39 percent).


Achieving Boardroom Diversity Without Marginalizing Anyone

While women have come a long way, there is still a long way to go before we reach gender parity at the top levels of corporate America. As CEO of a women-owned search firm with the serious intention and track record of placing women and members of underrepresented groups in boardrooms and the C-suite (85 percent and 80 percent, respectively), Janice Ellig, CEO at Ellig Group, is deeply engaged with this particular struggle on a daily basis. “So, what I am about to say may sound like an oxymoron, but it is not,” she said. “While diversity must be considered a top priority in selecting corporate leadership, it should not be the sole criterion on which a selection is based. Rather, priorities have to be balanced to achieve the best and most equitable outcomes for good corporate governance.”


The report found that the percentage of new directors who are women has decreased from last year: 42 percent of appointments, down from 46 percent in 2023. It is also a decrease from five years ago, when the proportion of female new directors was the same as in 2023 (46 percent). However, it is a significant increase from a decade ago, when the proportion of female director appointments was 30 percent. Like last year, 78 boards (16 percent) expanded to add one or more female directors.

Among first-time directors, female directors make up 46 percent of appointments this year, down 10 points from 2023, according to the Spencer Stuart report. A decade ago, just under a third (32 percent) of female directors were first-time directors. There’s been an increase in the number of female director appointments who have financial expertise. This year, 15 percent have worked in financial services, compared with 11 percent in 2023. And over a third (34 percent) have a financial background, compared with 25 percent in 2023.

However, Spencer Stuart found that the percentage of female director appointments who are active CEOs continues to lag behind that of male directors (eight percent vs 21 percent). On average, female independent directors join and leave boards at younger ages than male directors. The average age of female new independent directors is 56.8, which is about three years younger than their male counterparts (59.1). Female directors are more likely to retire in their sixties (42 percent), and male directors are more likely to retire in their seventies (52 percent).

Related: Aligning Diversity and Talent in Board and C-Suite Recruitment

The percentage of new directors who self-identify as underrepresented minorities (26 percent) is at its lowest level since 2020, according to firm’s findings. However, representation has increased markedly in a decade; in 2014, only 12 percent of new directors self-identified as underrepresented minorities. In the class of 2024, Black or African American individuals make up 10 percent of new directors — five percentage points less than in 2023 but a 67 percent increase in a decade. The representation of Asian directors (10 percent) decreased one point from last year, and the representation of Hispanic or Latinx directors (six percent) decreased three points. “The levels for each have increased drastically from what they were a decade ago: Hispanic or Latinx representation has doubled, and Asian representation has more than tripled,” the Spencer Stuart report said.

Of the new directors who self-identify as underrepresented minorities, 16 percent are active CEOs.

  • 29 percent of new Asian directors are active CEOs.
  • 13 percent of new Hispanic or Latinx directors are active CEOs.
  • 0 percent of new Black or African American directors are active CEOs

Spencer Stuart also found that the most common industry background for new directors who self-identify as underrepresented minorities is technology/telecommunications (19 percent). Like last year, 10 percent of boards expanded to add one or more directors who self-identify as underrepresented minorities. Female directors make up a smaller share of underrepresented minorities among the class of 2024 than they did last year (10 percent vs 15 percent), returning to 2019 levels.

Of the next-gen directors appointed this year, 69 percent are diverse. This is down from 2023 (82 percent). Among next-gen directors, female directors make up over half (55 percent) of appointments. This is up 10 percentage points from 2023. Appointments of underrepresented minorities among next-gen directors dropped significantly in a year, from 52 percent in 2023 to 29 percent in 2024. But levels are almost triple what they were a decade ago (10 percent).

Of the first-time directors appointed this year, 68 percent are diverse, according to the Spencer Stuart report. This is down from 2023 (75 percent) and 2022 (82 percent). Among first-time directors, female directors make up 46% of appointments. This is down 10 percentage points from 2023 but is a 44 percent increase from a decade ago, when female directors were about a third of first-time directors. Appointments of underrepresented minorities among first-time directors declined slightly to 34 percent from 36 percent last year, after a significant drop from 2022 levels (61 percent). However, they are more than triple the level of a decade ago.

“Despite the persistent headwinds of slow boardroom turnover, the composition of S&P 500 boards has shown year-over-year advancements in diversity,” the Spencer Stuart report said. “The representation of women and underrepresented minorities on these boards continues to increase gradually. In total, half of all S&P 500 directors are diverse. Some demographic groups on S&P 500 boards are beginning to align more closely with the broader U.S. population. Others still have a significant disparity in representation.”

Women Representation Increasing

Female directors now account for 34 percent of S&P 500 directors, up one point from last year, the report found. This is an 81 percent increase from a decade ago and a 32 percent increase from five years ago. S&P 500 boards today average 3.7 female directors, up from 3.6 last year and 2.0 in 2014; 99 percent of boards have two or more female directors. Only six boards have only one female director.

The representation of women in board leadership is increasing on all but one count: The percentage of women as independent board chairs has remained the same since last year (18 percent). The percentage of female lead directors has increased five percentage points from last year to 20 percent. Spencer Stuart found that representation of underrepresented minorities in board leadership has improved slightly from last year in three out of five categories. Only seven percent of S&P 500 independent board chairs and 11 percent of lead directors self-identify as underrepresented minorities — both have decreased one percentage point from last year.

Nearly all S&P 500 boards (99 percent) disclose their gender balance and composition relating to underrepresented minorities. More boards this year — 58 percent up from 56 percent in 2023 — report the implementation of a policy like the Rooney Rule, which includes individuals from diverse groups in the candidate pool when recruiting new directors.

To read the report’s full findings click here!

Related: Women Still Lag on Boards and in the Executive Suite

Contributed by Scott A. Scanlon, Editor-in-Chief; and Dale M. Zupsansky, Managing Editor – Hunt Scanlon Media

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