Thoughts on Asian Americans in the Boardroom
Updated: Jul 2
[UPDATE: A slightly different version of this piece was posted on the Harvard Law School Forum on Corporate Governance on May 7, 2020.]
One of my law school students recently asked me for my thoughts on Asian Americans in the boardroom, including my own experiences. This is an interesting thread of the board diversity discussion, and this post is based on my response to him.
Throughout American history, we've never seen a real sense of urgency to increase the numbers of Asian Americans in corporate, professional, or civic leadership positions, despite their success in the upper-middle ranks of a multitude of fields, most notably medicine, engineering, and information technology. It seems like Asian Americans are still in the phase of breaking the "color barrier," or "bamboo ceiling" (e.g., Andrew Yang, Nikki Haley), and there are some interesting theories behind that (even some comparing among different Asian ethnicities). Similarly, we haven't seen the sense of urgency to increase the numbers of Asian Americans in boardrooms. Is that about to change?
Based on 2018 data, the percentages of Fortune 500 board seats held by people identified as African American/Black, Hispanic/Latino(a), and Asian/Pacific Islander were 8.6%, 3.8%, and 3.7%, respectively. That was up from 7.6%, 3.0%, and 2.1%, respectively, in 2010. (Source: Deloitte/Alliance for Board Diversity). Based on the latest estimates from the US Census Bureau, African Americans/Blacks represent 13.4% of the US population, Hispanics/Latinos 18.3%, and Asians 5.9%.
There's some evidence that Asian American women may be treated differently than Asian American men, resulting in relatively better recent success in landing board seats. Representation of Asian/Pacific Islander women on Fortune 500 boards increased 38.6% from 2016 to 2018, whereas the increase was 20.3% for Asian/Pacific Islander men. This may be attributable to the more deliberate and intense focus on increasing the number of women in the boardroom (more on that later). Board recruiters have told me that Asian American men are treated, for all intents and purposes, as white males for director searches. This seems strange given the aggressive push for more overall diversity by the NYC Comptroller, Goldman Sachs, the US Congress, and others.
A "model minority" director?
We've all heard the cliché that Asians are the "model minority" group in America. This has been a controversial claim in terms of what that is supposed to mean and what it's based on. My own take on this characterization is that it comes from the perception/stereotype that Asian Americans work hard, are fiscally conservative, focus on their children's education, and have cultural tendencies to accept subordinate positions and defer to higher authority. It also follows from the belief that Asians are brought up to remember the proverb, “The nail that sticks out gets hammered down,” and not draw attention to themselves or vocalize dissent.
Interestingly, the stereotype that Asian Americans are less likely to rock the boat should actually make them more attractive director candidates if you follow the school of thought that boards are still for the most part hand-picked by the CEOs, and CEOs seek out directors who will most likely go along with the program. Also, the fact that a lot of the eligible Asian American director candidates can be found in the tech sector, or in tech-related roles at non-tech companies, suggests they would be attractive to boards due to the increased demand for tech, cyber, blockchain, and AI knowledge and experience on boards.
For whatever reason, neither of those dynamics have played out. It may have to do with Asians being less likely to advocate for themselves when it comes to being visible to the people looking for board candidates. Like with many competitive positions in this country, people who get selected to be board members are ones who "play the game." They proactively network with the people who are in the boardroom or who can get them there. They enroll in training programs on how to land that first board seat and understand the job of a director. Asian Americans may be less likely to do that. Unfortunately, while making sure you're never the "nail that sticks out" may be a good career strategy back in the "old country," here in the land of the free and the home of the brave it's fortune cookie wisdom that will only serve to hold you back. And, of course, the dearth of Asian Americans in CEO and other c-suite positions at large public companies is a major structural barrier, as it is for other minorities and women.
Prepare to stand in line
My theory is that the diversification of boards with regards to gender and race is following the same patterns we've seen in the various civil rights movements in American history. Women fought for and were able to successfully gain full access to the ballot box in the early 20th century. After that, it was African American groups that mobilized and got results during the mid-century civil rights movement. From then on, the prominent voices for civil rights have mostly been African Americans and now Hispanics (although to a lesser extent). The national movement and well-recognized leaders for Asian Americans are still yet to come.
What I see happening in the corporate governance arena right now is a similar progression. In the current push for diversity in the boardroom, corporate leaders (e.g., Thirty Percent Coalition), investors (e.g., State Street Global Advisors), and policy-makers (e.g., California) have focused more of their energies on getting every public company board to have at least one female director and accelerate the replacement rate of board members to 50% women.
It makes sense because for gender diversity the choice is binary (with very few exceptions), the data on the benefits are available, and the goal line is clear (50:50). Anytime you wade into a discussion over race in this country, it very quickly becomes highly charged and political. Who is to identify a person's race? What about people of mixed race and ethnicity? (Recall Tiger Woods famously, and controversially, identified himself as "Cablinasian.") Which racial groups should benefit from affirmative action and why? What's the "right" proportion for each race? And what about claims of "reverse discrimination"? Progressive social change in the boardroom has always lagged way behind the corporations themselves. Boards would rather resolve the more clear-cut issue before jumping into the more complicated one fraught with reputational risk.
As these dynamics play out, Asian Americans will be standing in line behind women, African Americans, and Hispanics for open board seats.
My own experiences
It's very hard for me to determine whether being Asian American has impacted my career one way or another, and frankly I haven't spent a lot of time thinking about it. It probably hasn't helped very much as I've never seen any clear indication that I've benefitted from it. (Maybe being of Chinese descent helped get me an expat assignment to Hong Kong in the law firm stage of my career, even though I didn't speak Chinese?) I'm pretty sure it was not much of a positive or accelerating factor for how I became corporate secretary at Johnson & Johnson, and I got that promotion at a relatively young age (39), so I can't really claim that my race slowed my progress to get there.
Regarding my work inside the boardroom, I didn't feel much of an impact of being Asian American on how I was able to do my job. The corporate secretary position was really designed to be more of an observer, and people successful in that position excel at playing a behind-the-scenes role, which I guess fits the Asian stereotype. (Maybe people were quicker to think that I was too direct and opinionated and veering outside of my lane?) Not to my surprise, I was almost always the only person of Asian descent at board, committee, and senior-most leadership meetings, but I doubt anyone else in the room was cognizant of that. On the other hand, I definitely saw glaring instances of gender stereotypes impairing the ability of women to be taken seriously in those settings. Unfortunately, that's still pervasive across all roles at corporations.
If you are interested in learning more about Asian Americans in the boardroom, the organization Ascend has an initiative called Pinnacle, dedicated to increasing the number of Asian American corporate directors.
A Note About Terminology: The terms "African American/Black," "Asian/Pacific Islander," and "Hispanic/Latino(a)" used in the Deloitte/Alliance for Board Diversity report include people from outside the United States who were not born and/or raised here. The term "Asian Americans" as I use it in this post refers only to people who were born and/or raised primarily in North America.