Trump's crackdown on diversity reverberates in US boardrooms

The number of appointments of women and minorities of all races to S&P500 boards has dropped to its lowest level in over a decade. This threatens to undo years of progress in boardroom diversity.

This shift can be seen in the new research by recruitment firms who study leadership diversity, and in interviews with over a dozen boardroom interviewers, investors and HR analysts.

This comes after a series Trump administration initiatives targeting DEI, or diversity equity and inclusion. Major investors in 'corporate America who once pushed companies to diversify boards have now retreated.

RECORD DIVERSITY MASKS SHIFT IN NEW APPOINTMENTS

Spencer Stuart, a global executive search firm, released new data on Tuesday that shows the diversity of board appointments has been steadily declining since its peak at 72% between 2021 and 2022. According to leadership advisory firm, of the 364 independent directors appointed to S&P500 boards in the year ending April 30, 40% were females or minorities. This is the lowest number since 2014 when 39% were diverse.

Spencer Stuart reports that diverse directors currently hold 49.3% seats on S&P 500 boardrooms, a slight decrease from the 49.6% record set in 2024-2025.

The recent increases in diversity are a result of years of appointments made following the #MeToo, and Black Lives Matter movements. While board diversity is at a record high, new directorships are becoming less diverse. This suggests that these gains could be difficult to maintain if the current hiring practices continue and more new board seats go to white men.

George Anderson, coleader of Spencer Stuart’s North American Board Advisory 'Practice,' said that boards are responding in response to the changing legal, governmental and political pressures. He explained that the trend of hiring current and former CEOs as directors is one of the reasons for the decline of diversity. This year, 37% of all new directors were ex-CEOs. It was the highest number in 15 years. He said that companies see these executives as being well-suited to handle complexity. However, the CEO talent pool was less diverse.

This shift in boardroom appointments is accompanied by a dramatic decline in companies publicly citing the importance of diversity in board recruitment. According to PeopleReturn's data, which was provided by a firm that provides human resources analytics, only 12% of S&P500 companies disclose they use some form of diversity criteria when making board decisions. This is down from 23% of S&P500 companies in 2025 (when President Donald Trump started his second term) and 48% of S&P500 in 2024, under President Joe Biden. PeopleReturn reports that board diversity reached a peak of nearly 50% in this year.

While supporters say that the initiatives expand opportunities for historically underprivileged groups and improve governance, Trump and others criticize them as discriminatory against white men and women and a threat to merit-based advancement.

Kristin Hull is the chief investment officer at Nia Impact Capital. The company, which frequently lobbys tech companies for social causes, says that the decline in corporate appointments reflects an increase of male leadership.

She said, "We made such progress." "Bro culture is now alive and kicking."

Robby Starbuck is a conservative activist who, in a series of high-profile campaigns on social media, urged companies such as Tractor Supply and John Deere to rollback DEI.

He said, "They focused on the wrong things and it showed in their earnings." Both companies did not respond to requests for comments.

Allison Schuster, White House spokesperson, responded that Trump was "resoundingly elected" with a mandate for ending divisive and racist policies, and restoring merit and efficiency.

"OUR COUNTRY WON'T BE WOKE ANY LONGER"

The Equal Employment Opportunity Commission (EEOC), created under the Civil Rights Act of 1965, was tasked by the Trump administration with eradicating what it calls illegal DEI policies that, according to the administration, gave women and minorities preferential treatment in hiring and promotion.

After the Supreme Court ruled that race should not be considered in college admissions in 2023, many companies canceled or reevaluated their diversity initiatives. The decision did not cover corporate practices but it triggered a legal threat against companies for a variety of diversity initiatives.

Last year, Trump issued executive orders that restricted certain DEI programs within federal contractors as well as the federal government. He then declared: "Our country will no longer be woke."

Trump's administration threatens hefty fines against companies who do not comply.

IBM agreed in April to pay $17million to settle allegations that it discriminated against certain employees and failed comply with Trump's order calling DEI initiatives illegal to federal contractors.

The U.S. Justice Department claimed IBM gave priority to diverse candidates when hiring and tied bonuses to meeting certain demographic targets. IBM, the first U.S. firm to be targeted under Trump's anti DEI directive for its employment practices, has not responded to requests for comment.

The settlement agreement denied that there was any wrongdoing.

However, shareholders have not shown much interest in proposals that would weaken DEI. Conservative shareholder proposals aimed at corporate DEI efforts received only 1.5% average support in recent annual meetings. This is a typical level.

Board Recruitment Shifts Away from Diversity

Interviews with over a dozen recruiters and investors, as well as employees, revealed that companies place less importance on diversity when it comes to board recruitment.

This shift can be seen at companies such as Johnson & Johnson and Goldman Sachs, which championed diversity after the #MeToo and 2020 protests against the police killing George Floyd.

Goldman dropped its requirement in early 2017 that companies going public had at least two board members who were diverse. It cited "legal developments", weeks after Trump's?first executive orders targeting diversity initiatives. Goldman's spokesperson stated that the firm believes diversity is important to its success and enhances performance. Amex and J&J did not respond to requests for comments.

The INVESTOR RETREAT eases pressure on board diversity

PeopleReturn CEO, Josh Ramer, said that top asset managers like BlackRock Vanguard State Street had withdrawn from DEI. This has eased the pressure on companies to increase board diversity.

"All of the large investors who were pushing this issue have stopped talking about it. He said that large-cap executives are under less pressure to talk about it.

Previously, fund managers had to ensure that there was a certain amount of diversity in the company boards they owned stock. BlackRock, as an example, called for 30% diversity on company boards in late 2021, while Vanguard in?2022 called for diversity in gender, race, and ethnicity at a minimum.

Last year, both companies removed this language. State Street lowered its expectation that by 2025, women would make up at least 30% on major company boards.

Three asset managers declined comment on this article.

In the C suite, recruiters report that diversity is now less important in executive searches. Spencer Stuart reports that women and minorities accounted for 22% of the S&P 500 CEOs in 2013. This is down from 23% a year earlier.

Spencer Stuart and PeopleReturn tracked the race, ethnicity, and gender of board members using self-identified data, which was supplemented with information from outside sources.

Today, we hear more about "the best person." Jeff Christian, CEO at executive headhunting company Christian & Timbers, said that being a person or color is less valuable than it used to be.

(source: Reuters)