As scrutiny of diversity, equity and inclusion programs increased in 2024, the number of diverse individuals newly appointed to corporate boards decreased, though boards are more diverse than they were 12 years ago, leadership firm Egon Zehnder found in their 2024 global board diversity tracking report. President Donald Trump also has focused a number of executive orders in his second term on the topic. I talked to Cynthia Soledad, Egon Zehnder’s global head of DEI, about what this report means for diversity on boards, as well as in the C-suite and corporate offices, too.
This conversation has been edited for length, clarity and continuity. It was excerpted in the Forbes CEO newsletter.
What does this study say to you in terms of progress, understanding, and how people are feeling about diversity?
Soledad: I like to focus on the positive first, we collectively have an overall positive takeaway that representation continues to be increasingly diverse over time. We have longitudinal perspective on this as well. We’ve been tracking these numbers for 20 years, and certainly when you look longitudinally over those 20 years, the progress is very clear. That diversity on the board, we know, leads to better decision making. It’s good for business and good from a representation perspective.
I think the sobering side of it is the progress is being made in a more fraught environment, in a more contentious environment. The percentage of appointments in the more recent two years made to women is a smaller percentage than in prior years. While overall we’ve seen that overall macro progress in representation, it’s a little bit sobering that the percentage of appointments declined a bit.
Putting that in the context of a more contentious conversation on diversity and inclusion, especially in the U.S., means this is something we need to watch.
Would you say that slowing progress is a result of the anti-DEI rhetoric that we’re hearing a lot of, or would you say that it might be less organized: There weren’t as many female candidates that rose to the top, or were available to be on boards, that sort of thing?
A lot of the rhetoric around shifts in DEI policy are really more at a corporate level as opposed to a board level. The programs that are really about the talent management systems that may exist within the corporations.
I would say, anecdotally, the work that we are doing in board searches and board placements, we are not hearing or seeing less interest [or] less emphasis with our clients on the importance of diversity and diverse representation on boards. I do think there are some elements where the big increases that we’ve seen in the last few years in appointments for women on boards means that yes, there are some women that are at capacity. So there is that reality as well: Women have been so sought after in these last few years, that there are many women that are at their capacity for the board service they can take on.
Right now, it may be more coincidental that these conversations around corporate practices in DEI [are] a conversation right now. What we don’t want to see is that shifts in any corporate practices lead to a change in the way the pipelines of talent up to the top are being developed.
There’s been a lot of demonizing DEI, but when you look at companies, there was a study on LinkedIn recently where almost nobody was cutting back on DEI. From where you sit, how does it break down? What do you see as the actual feelings about DEI, both for boards and for corporations?
Starting with the corporate practices, I would say that the headlines are exaggerated. What is being called in a headline a “pullback” on DEI practices, in point of fact, is usually not that. DEI work has continuously evolved over time, particularly as regulatory changes, legal changes happen. For example, the affirmative action ruling a few years ago, and the subsequent legal test cases that are being brought around corporate practices that look similar to affirmative action. Those regulatory shifts and changes in test cases do require companies to evaluate their practices and say, ‘Is there anything that we would want to adapt and change because the regulatory environment’s changing?’
That’s most of what I am hearing from the clients we work with: an evaluation given regulatory changes in the environment, not at all a rollback in terms of the importance of inclusive culture, diverse representation, and continued investment.
I think there is also a concern that, because these headlines and sound bites are being written: DEI is under attack, it affects morale. Companies are concerned that their employees will read these headlines and feel that these investments in inclusive culture are at some risk. I also am hearing from CHROs and DEI officers and CEOs that they are very focused on the engagement of their employees, keeping that engagement high and helping those employees understand their levels of investment in DEI.
How do you see President Trump’s DEI policies in the federal government impacting the private sector? How about C-suites and boards?
There is a ripple effect into the private sector partly because so many private sector companies serve the federal government in some capacity and these policies impact suppliers. In addition, these actions are obviously intended to sway public opinion beyond government. Even those companies who do not have government contracts will take note of the rhetoric, and their behavior could be influenced by the fear it is intended to create.
We believe the most direct possible impact is on corporate policies that influence supplier diversity, talent, and culture; impact to board diversity efforts could be softer. Nonetheless, these efforts are at some risk as well.
Where do you see DEI heading as a corporate policy or priority in the upcoming years? Will it be something that companies and boards do without a policy in place? Will it remain as a common corporate value?
Our conversations with C-suite leaders and board directors indicate strong conviction for the importance of diversity in American corporations at all levels. And these leaders absolutely seek to create fully inclusive corporate cultures in order to maximize the potential of their diverse workforce. It is disheartening and distracting for them to have to defend practices they feel are important to run their businesses effectively. Businesses must obviously comply with changing regulations, so depending on how different legal challenges play out, some programs may be impacted. I do believe the concept of creating environments where a widely diverse array of talent can thrive and bring their most innovative ideas is here to stay as a corporate value and as a sound business practice. The ways in which companies create those environments will keep evolving.
In the study, you had written that when things like this happen, it’s not time to get rid of policies, but to reframe, reevaluate, innovate. How would you recommend doing that at this moment in time?
There’s a core to doing DEI work that is about being able to meet people where they are and hear different perspectives. That is actually a core inclusive leadership skill. So whenever there are dissenting voices—including: Hey, I don’t understand this DEI thing. I don’t think it’s beneficial. When I say that there’s an opportunity for reframing or understanding or innovating, we have to understand what the concerns are and really listen. And evaluate: Are there things that we need to do to ensure that investments that are being made in the development of talent in the organization are inclusive programs? That all identities have access to those development programs? If there is a perception that these development programs are only accessible to, for example, women or underrepresented minorities, that’s something that needs to be addressed. A lot of companies have ensured that the way in which they talk about these programs, the way in which one gets access to these programs, is indeed truly inclusive.
Some of these truly are misperceptions and misconceptions, which is why there has been a lot of focus, I believe, for companies on: How do we communicate our investments in DEI? And how do we ensure that the way in which we communicate those demonstrates true inclusion? There has been a perception that DEI only serves a few, and that is absolutely not the intent of the word “inclusion,” frankly, or the word “diversity.”
[After President Trump’s moves on DEI,] we feel it is even more critical that board chairs reengage in conversations with the full board and potentially with other stakeholders on their commitment to diversity and inclusion as a sound business practice. I would point to Costco’s actions as an excellent example. If the board recommits to the principles then it provides an anchor around which the organization could keep innovating its approach as business needs or the regulatory environment change.
Looking at corporate boards, what are ways that there needs to be a reframing and a different look at diversity?
Because of the rhetoric out there, this is an opportunity for boards to reengage in a discussion on what is our DEI agenda and commitment at a board level, and truly reengage all directors in that conversation. There was a potential risk back in 2020 when the volume on the DEI conversation was also very high, that people were swept up in that energy.
This is an opportunity in a new environment to reengage in that conversation and say: What were we here to do, and have we been accomplishing our objectives from both a representation point of view as well as the inclusive culture on the boards? There are many boards that have grown more diverse and need to ensure that the culture on those boards allows space for all of those diverse perspectives that they’ve worked so hard to attract are heard. That there is time for debate. That those debates are fully psychologically safe, even for the newest directors, the dissenting opinions, these kinds of things.
Another thing that we have witnessed is that while the diversity of board directors have continued to progress, the diversity of board chairs or other leadership roles hasn’t consistently increased at the same pace. So looking at succession planning processes and saying: Are succession planning for leadership positions within the board also inclusive and equitable? How can we continue to develop the pipeline within the board up to leadership positions, and ensure that is also diverse? These are some practices that we think boards can continue to focus on.
Where do you see things going with the conversation around diversity, both as a policy in corporations, as well as with boards, in 2025?
I think we can expect the landscape to continue to be fraught for the next year on this topic, with potentially more legal challenges to come. Because of this, companies will have to keep evolving their approaches.
I also think that the commitment that companies, corporate leaders and board leaders have made to diversity and inclusion in companies is real. There is a core belief that companies are serving diverse customer bases, companies already have more diverse workforces than they have historically, and that they want to hold onto the best talent that they can with a diverse pipeline of talent. While the conversation in 2025 will still be a bit contentious, I think the core practices will remain steady. I think companies are continuing to invest in building diverse pipelines of talent all the way up to the top, all the way up to board representation. What I am hearing from leaders is they want to protect that work, and to try to frankly move through all of the somewhat distracting headlines as quickly as possible and stay focused on the core work.