Board Diversity in Industrial Companies: Progress, Plateaus, and the Path Forward
Board diversity in the industrial sector has made meaningful progress over the past decade but faces a plateau that governance experts say requires deliberate action to overcome. According to the latest data from Spencer Stuart's Board Index, women now hold 32% of board seats in S&P 500 industrial companies, up from 16% in 2015 and 28% in 2022. Racially and ethnically diverse directors hold 24% of seats, up from 10% in 2015. These gains are significant but have slowed considerably in the past two years, with the rate of new diverse director appointments declining 15% in 2025 compared to 2023.
The plateau is partly structural. As boards have added diverse directors, the pool of experienced candidates who meet traditional board qualification criteria — public company CEO experience, financial expertise, industry domain knowledge — has become increasingly competitive. "We are not experiencing a shortage of diverse talent. We are experiencing a shortage of imagination about what constitutes board-relevant experience," said Coco Brown, CEO of The Athena Alliance, which helps prepare women for board service. Brown advocates for broadening qualification criteria to include operating executives (COOs, division presidents), technology leaders (CTOs, chief digital officers), and functional experts (CHROs, chief sustainability officers) who bring diverse perspectives and relevant expertise.
Technology expertise on industrial boards remains alarmingly scarce. A study by Heidrick & Struggles found that only 12% of board directors at the 50 largest industrial companies have deep technology backgrounds, despite the fact that technology investment decisions represent the single largest capital allocation category for most manufacturers. "Industrial boards are making billion-dollar decisions about AI, digital twins, and cybersecurity without adequate technology expertise in the room," said Bonnie Gwin, vice chairman at Heidrick & Struggles. "That is a governance risk that institutional investors are beginning to take seriously."
Institutional investors are indeed using their influence to push for both demographic and skills-based board diversity. BlackRock, Vanguard, and State Street — which collectively manage over $20 trillion in assets — have all published explicit expectations for board diversity, and each voted against directors at industrial companies that failed to meet their diversity standards in the 2025 proxy season. Glass Lewis and ISS, the two dominant proxy advisory firms, have incorporated board diversity into their voting recommendations, creating additional pressure on companies that lag their peers.
Companies at the forefront of board diversity in the industrial sector offer useful models. Illinois Tool Works, which has been recognized by Bloomberg's Gender-Equality Index for five consecutive years, maintains a board that is 42% women and 33% ethnically diverse, with directors bringing expertise in AI, cybersecurity, and sustainability in addition to traditional industrial operating experience. ITW's lead independent director, Anré Williams, credits the company's approach to a structured skills matrix that identifies specific expertise gaps and diverse candidate slates that include at least 50% women and underrepresented minorities. "Diverse boards make better decisions because they bring a wider range of perspectives and are more likely to challenge groupthink," Williams said. "The data on this is unambiguous, and any company not acting on it is sacrificing performance for inertia."