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30% of Boards Include Minorities, Survey Says : But Figures Are Misleading as Many Directors Serve More Than 1 Firm, Consultant Argues

September 03, 1987|BRUCE KEPPEL | Times Staff Writer

The corporate board room--still heavily dominated by white males--is continuing to undergo a change in composition that stalled in the mid-1980s, an executive recruiting firm said Wednesday.

Korn-Ferry International, which released the findings of a survey of 1,000 major corporations, said 30% of the 532 responding firms had at least one director from a minority group on their boards last year. That compares to 25% in 1985, which was down from 26% in 1984 and 1983.

Encouraging as the increase may be, the survey finding means that more than two-thirds of the nation's major enterprises remain without any minority directors at all. And Earl (Skip) Cooper, president of the Black Business Assn. of Los Angeles, said even 30% minority representation appears high.

LeRoy Jeffries, president of Jeffries & Associates, a black-owned management consulting firm in Los Angeles, said most minority directors serve on the boards of more than one firm, further reducing the actual numbers of minorities participating in top-level corporate decision making.

When Korn-Ferry began its survey in 1973, only 9% of the responding firms had a minority director. The number increased annually until 1983, said Jack D. Steele, chairman of the board services division, which handles recruitment of outside directors for Korn-Ferry clients.

The best records were compiled by large retailers, Steele said, with 55% of the respondents reporting minority board representation, followed by financial institutions with 53%.

Size also seemed to be factor: 40% of responding companies with sales exceeding $1 billion and 51% of those with sales exceeding $5 billion have minority representation. Five years ago, that was true of only 32% of the billion-dollar corporations queried.

Steele attributed the improved minority representation to increased awareness among chief executives of the importance that a diversity of directors can offer a major corporation--particularly in the retail and financial fields, where the minority markets are particularly significant. Among these companies, he said, the improvement relates more to business needs than to the "tokenism" that formerly prevailed.

"It's positive in that sense," Steele said in an interview from the company's Century City headquarters. "The board is coming to be viewed as more a resource than a requirement. After all, you can get on a board people you couldn't afford to have on your staff.

"I believe that corporate governance is one of the most important reasons underlying our competitive problems," the Korn-Ferry executive said.

Steele offered no explanation of why the upward trend had flattened after 1983.

But an earlier survey by the National Assn. of Corporate Directors, which reported a similar flattening of the growth curve, attributed it to the shortage of available insurance for directors and officers.

"Companies were not adding directors because of the lack of (directors and officers) insurance," said John Nash, the association's president. "Now that's changing."

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