Women comprised roughly two-thirds (67%) of the 43 general counsel appointments at Fortune 500 companies in 2022, the first time they outpaced men in being selected for these high-profile appointments, according to a report from Russell Reynolds Associates.
This high-water mark for women legal chiefs came one year after they made up nearly half of the 59 legal chief selections at these large companies, the executive search firm found, and continued an accelerating trend in recent years.
“It is remarkable to think that only a few years ago we were remarking on the fact that 30% or so of newly appointed F500 GCs were women, and now that number has reached 2/3 of all appointments and close to 40% of all F500 GCs,” said Cynthia Dow, who leads the global Legal, Regulatory and Compliance Officers Practice at Russell Reynolds Associates.
Dow told Legal Dive the results are a testament to the great success women lawyers have had in other senior in-house legal roles, which has created “a deep pool of talented female attorneys who are available to be recruited to F500 GC roles.”
“It is also a reflection of the years of committed mentorship and development on the part of other GCs, as well as corporate leadership teams, as well as a commitment to having diverse slates of candidates to consider,” she said.
The trend of more large companies appointing ethnically diverse GCs also picked up steam in 2022.
Overall, 38% of the general counsel appointments at Fortune 500 businesses last year had ethnically diverse backgrounds, which Dow said was the highest-ever level.
This was a big jump up from the 22% of the 52 GC appointments in 2020 who were ethnically diverse and a slight bump from the 34% figure in 2021.
“It reflects a real effort on the part of many companies to diversify their executive leadership teams by ensuring that slates of candidates — whether internal or external — are highly diverse,” Dow said.
“This focus greatly increased following the murder of George Floyd and renewed momentum behind Black Lives Matter, as well as the broad commitment to ESG initiatives by many companies which are seeking to show progress on social dimensions such as diversity, equity and inclusion,” she said.
The rise in ethnically diverse GCs has also come as more companies have hired external candidates for legal chief in recent years.
Externally hired legal chiefs are 67% more likely to be ethnically diverse compared to internally appointed GCs, according to Russell Reynolds Associates.
Another trend spotlighted in Russell Reynolds Associates’ recent report is that Fortune 500 companies have a growing desire to hire GCs with prior experience in the role and in their business sector.
The COVID-19 pandemic has been a key driver of these trends, as has the uncertain economic environment.
For example, 41% of externally appointed GCs prior to March 2020 had experience in the same sector of their new company.
Since March 2020, 60% of externally appointed GCs have possessed prior sector experience.
“In a tough business environment where most leaders have little time to learn the job, and particularly in highly regulated sectors, sector experience continues to be an important consideration,” the report said.
However, the strength of preference for industry experience differs based on the business sector.
“Healthcare has a strong preference for GCs with prior industry experience, whereas the technology sector is more open to GCs with experience across other sectors, especially when trading this off for government experience,” the report said.
Will hiring trends continue?
Dow said the significant increases in the percentages of women and ethnically diverse attorneys appointed to Fortune 500 legal chief positions in recent years are unlikely to continue at the current rates.
However, she said diverse executive teams will remain important to boards, investors and other stakeholders, so “the GC role will continue to be a place where women and ethnically diverse executives are available and therefore an attractive way to diversify leadership teams.”
Additionally, she expects relevant sector experience will remain a priority in GC hiring due to the difficult macro environment, including recent bank failures, the ongoing war in Ukraine and market volatility.
“In such a challenging business and geopolitical climate, experience — whether in a particular role such as the GC or in the industry sector — will continue to be valued,” Dow said.