NEW YORK--(BUSINESS WIRE)--As corporate boards continue to grapple with a number of HR-related issues – including implementing hybrid work policies; crafting environmental, social, and governance initiatives; and managing an ongoing talent shortage – they are bringing on a record number of HR leaders to help them navigate these challenges, according to a new report from the Human Resources practice of leading recruiting firm Allegis Partners. The report found that, between 2017 and 2021, the number of appointments of HR leaders to corporate boards increased by 300%. Its analysis is based off the Russell 3000, which represents 97% of the U.S. equities market by capitalization and identifies all HR leaders who served as a board director of a Russell 3000 Company as of December 31, 2021.
By the end of 2021, HR leaders held 250 seats on 242 boards, with 52% of appointments made between 2019-2021, and with 31 leaders sitting on two or more boards. In total, 8% of Russell 3000 boards count at least one HR leader among their directors. While HR experts on boards remain outnumbered by management and financial executives, their growing presence signifies an increasing interest from companies to prioritize talent and human capital- related issues.
“Our report shows that not only are corporate boards recognizing the value of having human capital expertise in their ranks, they’re taking significant action to bring HR leaders into the boardroom,” said Keith Meyer, Global Practice Leader – CEO and Board Practice. “In the past, HR leaders may not have been considered as strongly for board appointments due to lack of prior governance experience. However, companies are now demonstrating that this concern pales in comparison to the unparalleled value and unique perspective that HR leaders bring to board discussions involving their organizations’ most significant people-related challenges. This has become a moment for the talent and expertise of HR leaders to truly shine in the boardroom.”
Other notable findings in the report include:
- The increase in HR leaders enhances diversity of the board as a whole: Of the 211 HR leaders on boards, 89% are diverse by gender, race, or ethnicity. Specifically, 78% (or 164) are female – and of the 47 male HR leaders on boards, 49% are diverse by race or ethnicity.
- Sixty percent of HR leaders on boards are first-time directors. Over time, companies have increasingly recognized the value of HR expertise in the boardroom and have been more willing to recruit HR leaders, even if they lack prior experience serving on a board. While in 1991, the three-year running average of board seats newly awarded to HR leaders was just 0.7 seats per year, it has surged to 51 seats per year as of 2021.
- The events of the past three years in particular have been key drivers of demand for HR talent on boards. Between 2016-2018, 33 HR leaders were appointed to NYSE company boards – a figure that jumped to 77 leaders in the subsequent three-year period, between 2019-2021. Similarly, between 2016-2018, 30 HR leaders were appointed to NASDAQ boards, which jumped to 71 leaders between 2019-2021.
“Companies are making it clear that they now place a premium on human capital expertise,” added Greg Richter, Vice President. “Indeed, there’s never been a stronger business case for companies to prioritize addressing talent – and people-related challenges – and the diversity of experience and perspectives that HR leaders bring to the table are absolutely vital to tackling these issues.”
The full text of the Human Resources Leaders in the Corporate Boardroom report is available here.
About Allegis Partners
Allegis Partners is a boutique global executive search firm with a focus on identifying top talent for human resources, board of directors, chief executive officers, and other executive and senior management roles across industries. Our high-touch process and deep functional expertise allow our consultants to bring unique insight into each relationship and customize each search within the global market. We excel at identifying diverse candidates with extensive skills and knowledge that meet the specialized needs of our clients. Allegis Partners is backed by the extensive resources of the Allegis Group, the global leader in talent solutions. To learn more about Allegis Partners, visit https://www.allegis-partners.com.