By Ross Kerber

Boards of S&P 500 companies made recruiting directors with financial expertise their top priority over the past year, slowing boardroom gains for minorities, according to a new report.

Out of 388 new directors added by the top U.S. corporations, 36% self-identified as Black, Hispanic or other racial or ethnic minorities, down from 46% last year, said the report issued Tuesday by executive search firm Spencer Stuart.

Separately 46% of all new directors were women, the same as last year, it said.

Julie Daum, leader of Spencer Stuart's North American board practice, said boards still prioritize diversity and noted the share of new minority directors was double its 18% level in 2013.

But as companies face geopolitical and macroeconomic uncertainty they have sought new directors with financial expertise like chief financial officers or investment managers, or current or former CEOs.

Traditionally those roles have included more white executives, leaving a narrower pool of minorities from which to recruit directors and driving down their share of the new class. According to research firm Equilar, just three of 68 financial services CEOs in the S&P 500 are nonwhite.

"There is a desire to have CEO and CFO experience and there is not as much diversity in those categories currently," Daum said.

Investors have sought more boardroom diversity as part of a broader U.S. reckoning on race relations.

The decline in the share of new minority directors came from a drop in Black or African-American directors. They accounted for 15% of the new directors this year, from 26% in 2022. New directors of Asian background made up 11% of this year's class while 9% were of Hispanic or Latino origin, each a percentage point higher than a year ago.

Blacks account for 14% of the U.S. population, while Hispanics accounted for 19% and Asians 6%.

(Reporting by Ross Kerber; editing by Jonathan Oatis)