For an organization to optimize its success and deliver the highest quality products and services it must be two things: uniformly focused on excellence and in active pursuit of diversity, starting from the top. The data tells us so: Diversity improves performance, particularly when an organization’s most senior leadership is a collaborative and decidedly diverse team. This begins with a company’s board of directors. Other than the CEO, the board is the most visible face of a company, especially a publicly traded one.
Board composition sends a powerful signal to current and future workforces about an organization’s commitment to equality of opportunity. It also signifies a commitment to performance, since studies show clearly the benefits of a diverse workplace. McKinsey & Company found companies with strong gender diversity among their executives were 21 percent more likely to outperform on profitability compared with peers. They found the same held true for ethnic and cultural diversity among executives, whose teams were 33 percent more likely to lead in profitability in their industry. A study by Gallup of two large corporations in the retail and hospitality sectors found increases of 14 percent in comparative revenue and 19 percent in higher net profit respectively in gender-diverse business units versus less gender-diverse business units.
Performance comes from finding the best talent. And diversity, at its most basic level, is about increasing the pool of available talented people from which to choose.
“Organizations that ignore Millennials risk having their talent pool turn into a talent puddle.”
As CEO of Adtalem Global Education, a publicly traded company, I am laser-focused on finding and developing the best talent. It is my highest priority. We have made great progress in leadership diversity at Adtalem, both in board composition and in the makeup of my senior leadership team. Currently, Adtalem’s board is 37 percent African-American, 37 percent female and 62 percent diverse in gender and ethnicity. My leadership team went from being nominally diverse to 40 percent female and 73 percent diverse in gender and ethnicity. Adtalem is now more representative of our 18,000 global colleagues and the students we serve.
Now, one of the first things I learned in statistics class was that correlation doesn’t necessarily equal causation. But I’d be remiss not to mention Adtalem’s stock is up 129 percent in the nearly two years since I became CEO. This performance is all about the team. I believe that by broadening the talent pool, we’ve been able to recruit the leadership needed to focus on student outcomes and improvements, increase performance, drive growth and meet the strategic objectives of our diverse board.
Diversity is the future. The Census Bureau projects that by mid-century, there will no longer be a majority ethnic group. Even sooner than mid-century, the millennial generation will dominate the economy, providing 75 percent of the U.S. workforce by 2025. As a group, Millennials overwhelmingly support diversity. In fact, they expect it of an employer and rank diversity highly when considering a job. Organizations that ignore Millennials risk having their talent pool turn into a talent puddle.
I’m encouraged by the progress we’ve made in the U.S. on board diversity. While women and minorities are not represented on corporate boards at levels that reflect their percentage of the overall U.S. population, we’ve come a long way from where boards were a generation ago. But more work remains. Currently, I am the only female African-American CEO in the Fortune 1000. I’m certainly proud of my accomplishments and of becoming a CEO, but I wish I had more company in the ranks of senior executives and board members. If diversity needs to start at the top, there is still considerable work to be done.