Almost all top U.S. companies had board diversity rules. Now most are gone

Three years ago, nearly every major U.S. firm explicitly considered diversity when selecting new board members. Today, that is no longer the case. In fact, a significant shift has taken place, with nearly all top U.S. companies having removed explicit diversity criteria for future directors. According to an analysis by ESGAUGE, 61 S&P 100 companies have eliminated such provisions since 2023. Among those who have done so are Apple, Alphabet, Amazon, Starbucks, and Wells Fargo, among others.

Heather Spilsbury, CEO of 50/50 Women on Boards, notes that it is easier to dismantle diversity, equity, and inclusion (DEI) programs than to establish them. The decline in diversity provisions began in 2023 and has accelerated in recent months amid the Trump administration's efforts to dismantle DEI programs across various sectors.

ESGAUGE identified the companies that explicitly mentioned gender, race, ethnicity, or minority groups in their board-selection criteria and tracked which ones subsequently removed this language.

Six companies went a step further, incorporating similar diversity criteria into their CEO succession plans. These companies were AMD, Capital One, Microsoft, Starbucks, Uber, and Wells Fargo. However, all but Microsoft have since reverted to their previous stance. Starbucks and Wells Fargo, for instance, removed language requiring candidates to reflect diverse backgrounds, including race, ethnicity, gender, and sexual orientation, in their potential CEO candidates pool.

Moreover, the share of companies with Rooney Rule-like provisions — which require teams to consider at least one Black candidate for open positions — has sharply declined. This figure has dropped from 58% to just 12% over the past year, according to George Anderson, who co-leads the North American board advisory practice at Spencer Stuart.

Not all companies have abandoned diversity commitments, however. Microsoft continues to prioritize "highly qualified women and individuals from minority groups" in its CEO searches, as does Uber and Capital One, which are among the more than 30 companies still maintaining diversity criteria for directors. Microsoft, alongside Alphabet, Amazon, AMD, Uber, Starbucks, and Wells Fargo, did not respond to requests for comment. Apple also declined to comment.

The shift away from explicit diversity criteria in boardrooms is attributed to the goal of eliminating DEI policies that may introduce bias. Companies are increasingly opting for candidates from a pool dominated by former CEOs, who are predominantly White men, in response to economic uncertainty. Former CEOs made up 37% of new board members in S&P 500 companies this year, the highest share since 2012.

However, women's representation on new boards remains low, comprising only 29%, down from 46% in 2023. Teresa Kong, a director at Impax Funds and a member of several women on boards advocacy groups, acknowledges the decline in opportunities for women on boards. While she remains encouraged by the progress made since five years ago, she laments the current state of boardrooms being less diverse than before.