Over the last decade, research has revealed the breadth of racial and gender inequality among business leaders. More than anything, the numbers highlight how much corrective action is still needed.
A 2021 Gartner report found that BIPOC (Black, Indigenous, and People of Color) professionals of all types make up 31 percent of the total workforce but only 17 percent of the executive level company managers (the C-suite). Less than 1 percent of CEOs at Fortune 500 companies are Black with only four total, down from six in 2012. In fact, there have been only 17 Black CEOs of Fortune 500 companies in the past 20 years.
Similarly, Hispanic business leaders comprise only 4.3 percent of all executive positions, and Asian Americans represent just 1.5 percent of the C-suite in Fortune 500 companies. Gender diversity remains an issue as well. Of S&P 500 companies, only 6 percent have women as CEOs.
Researchers, the media, and established business leaders have touted the importance of diversity, equity, and inclusion. Now is the time to go beyond discussion—business leaders need to implement the changes that will transform their ranks. A Glassdoor survey found that 57 percent of employees think their employer should be doing more to increase diversity. Fortunately, the work of diversifying reaps rewards beyond the satisfaction of doing the right thing.
The Business Case for Leadership Diversity
A number of recent studies show a relationship between leadership diversity and companies achieving higher success in the marketplace. For example, McKinsey found that the most diverse workplaces were 35 percent more likely to perform above their national industry median. Much of the success is attributed to innovation in terms of new products, identifying more revenue opportunities, and finding untapped niches.
But what is it about diverse leadership teams that increases innovation?
Diversity Fuels Inspiration
Human survival has always depended upon adaptation to change. Thanks to evolution, people today still thrive on the stimulation of change.