Less Than 1 Percent Of Fortune 500 CEOs Are Black: Corporate America Must Change

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The protests around the country address an issue larger than police brutality and, if there is to be any long-term sustainable change, it's an issue that must be addressed by corporate America.

An unarmed black man in Minneapolis, knelt on by a police officer until he could no longer breathe. A black jogger—unarmed as well—chased and shot in Georgia. And a Louisville black man killed by police while protesting the police killing of black people. The nation, already reeling from a pandemic that has killed more than 100,000 and thrown millions out of work, blazed as protestors raged over how the rights and voices of black Americans are not heard.

The message, unfortunately, is not new, nor is it a complaint directed solely toward public institutions. This is much broader than a police brutality issue. It is an issue that needs to be addressed by corporate America. If there will be long-term sustainable change to increase black leadership in our companies, it has to come from the power source: CEOs and board directors. But those are seats that black people do not hold.

A study by Korn Ferry and The Executive Leadership Council (ELC), a national organization of   black CEOs, senior executives and entrepreneurs, found incredibly alarming statistics:

In 2020, there are only four black CEOs leading Fortune 500 firms, and fewer than 10% of the most senior P&L leaders in the Fortune 500 are black. In fact, since 1955, there have only been 15 Fortune 500 black CEOs.

The rapid decline in the number of black CEOs is disconcerting given the millions of dollars that companies have spent on diversity and inclusion programs. For things to change, organizations will need to create more inclusive cultures and career opportunities for black talent.

Even the black employees who have reached high levels of success in the corporate world say they had to take much bigger risks than their peers did to advance. In the Korn Ferry/ELC study, nearly 60% of the black executives who oversee major lines of business at Fortune 500 companies felt they had to work twice as hard—and accomplish twice as much—to be seen on the same level as their colleagues. These leaders felt like they had to prove themselves in ways that they perceived their colleagues did not have to.

Experts say that companies can benefit from tearing down traditional systems of hiring, team building, and leadership development and replacing them with actively inclusive ones. Innovative thinking often happens when people of different backgrounds and perspectives come together to solve a problem. Consider these statistics:

• Companies with ethnically diverse executive teams are 70% more likely to capture new markets than their less-diverse peers.

• These companies generate 38% more in revenue from innovative products and services.

Purposeful and participative leadership will help address this crisis—now.

Unfortunately, doing so likely will not be easy. Early corporate efforts often focused solely on filling open roles with a person of color; there was no effort to make inclusivity sustainable. Diverse teams also can, in the short run, be less productive than homogenous teams because of the disruption and conflict that can result when different perspectives, experiences, backgrounds, thinking and communication styles are merged.

But even as the rage from the protests continues to smolder, experts say that this is a good moment for corporate leaders to commit to pushing an inclusive agenda.

From a broader perspective, corporate leaders need to consider a full redesign of many of the company’s systems, including hiring, training, promotion and other practices. Many of those systems were designed for one type of candidate—a white, male—and keeping them perpetuates a lack of representation and voice. The default person can thrive, but we need to make sure that everyone else can, too.

To be sure, some D&I experts hold some of the same fears that many of today’s protestors harbor: that change may never come. But many of these same experts say they believe successful company leaders will recognize they must lead the movement themselves, while demanding their firms develop future inclusive leaders. Leaders like these are open to diverse points of view, motivate people from different backgrounds and reach out to traditionally underrepresented employees and clients.

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