Why Asian Representation on Boards is Essential for Meeting Stakeholder Expectations

by Susan Angele and Annalisa Barrett

69% of public Fortune 1000 companies still do not have an Asian director on their board. Diversity of background, experience and skills are important to rich boardroom conversations and decision-making. It’s critical now more than ever to take an honest look at a board’s composition.

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While board diversity is growing, there is still a long way to go to achieve a balance of representation from different racial, ethnic and gender groups, as highlighted by the recent KPMG Ascend Pinnacle report on Asian representation on Fortune 1000 boards.  

The report found that Asian Americans and Pacific Islanders remain underrepresented in the boardrooms of America’s largest companies compared with their presence in the professional workforce.  

As boards aim to align their makeup with corporate strategy and bring unique viewpoints to the table, diversity is front and center. The goal is to enhance board composition to help ensure members have the backgrounds and skill sets to meet stakeholder expectations.  

Diversity of background, experience and skills are important to rich boardroom conversations and decision-making. It’s therefore critical to take an honest look at a board’s composition. One KPMG Board Leadership Center study found that 69 percent of the directors surveyed said board diversity is relevant to their company’s consideration of its role in society. 

The 2022 KPMG Ascend Pinnacle report, based on data from 2021, found that 69 percent of public Fortune 1000 companies still do not have an Asian director on their board, a negligible improvement compared with 72 percent in 2020. Among larger companies, the percentage has remained essentially unchanged: 58 percent of Fortune 100 companies did not have any Asian directors on their boards in 2020, compared with 57 percent in 2021. 

Asian Americans are the fastest growing racial or ethnic group in the United States, but they are still among the lowest represented groups in the most senior corporate positions. Even though Asian Americans are more highly educated than the overall U.S. population and make up 13 percent of the professional workforce in the U.S., Asian Americans represent only 6 percent of U.S. executives and hold only 4 percent of public Fortune 1000 board seats. 

“Despite the increased attention and focus on diversity and equity in companies, the continuing absence of Asian directors from America’s top boardrooms is deeply disappointing,” noted Anna W. Mok, president and board chair, Ascend and Ascend Foundation, and co-founder, Ascend Pinnacle. “Due to the model minority myth and the ongoing perception that Asian Americans do not have workplace advancement challenges, many people may not be aware of the continuing underrepresentation of Asian Americans in leadership at the highest levels of American companies, including their boardrooms. This latest report is a clarion call for all of us to redouble our efforts to increase both awareness and representation.” 

“We have ample board-qualified Asian talent in the marketplace,” added Jeannie Diefenderfer, lead executive advisor, Ascend Pinnacle. “Asian directors offer not only unique talents and skills but also multicultural perspectives, experiences and wisdom that are and will be, in the years to come, even more invaluable in an increasingly global and interconnected world. We have to keep feeding the pipeline for Asian talent and ensure that it reaches into America’s top executive suites and boardrooms.” 

From a global perspective, more than half of consumers live in Asian countries, and their spending is expected to represent half of the world’s consumer spending by 2032, with India and China predicted to have the greatest increase in their consumer classes. 

There are some bright spots. For example, among the Asian directors serving on public Fortune 1000 boards, nearly 40 percent are female — an increase of 6 percentage points since 2020. This is relatively high in comparison to the entire population of public Fortune 1000 directors, where fewer than 30 percent are female.  

Also, Asian directors often bring age diversity to their boardrooms as well.  While only 8 percent of all public Fortune 1000 directors are under age 50, 16 percent of the Asian directors studied are that young. The median age for Asian directors is 57, in comparison to 63 for all public Fortune 1000 directors, and a plurality of Asian directors are in their 50s, in comparison to the plurality of the overall director population in their 60s. 

As business leaders plan their future path for attracting and retaining talent, customers and suppliers to sustain growth, it is imperative that there are diverse voices in the boardroom. While we see increasing numbers of new appointments of Asian directors, with nearly one-third of Asian directors added to boards within the last three years, progress is slow, with little gain in the overall representation of Asian directors at some of the largest corporations. 

Susan Angele and Annalisa Barrett are Senior Advisors, KPMG Board Leadership Center