To say 2020 has been nothing short of a rollercoaster would be an understatement. Not only have we have witnessed Australia nearly burn to the ground along with the death of legend and icon Kobe Bryant and his daughter, but we are also in the midst of a global pandemic that has put the world on hold. Undoubtedly, these have been some of our collective lows of 2020. Nevertheless, this list of a few of the year’s developments fails to mention the resurgence of the Black Lives Matter movement after the heartless murder of George Floyd at the hands of Minneapolis police on May 25th. Right away, people around the country took action and their voices were heard across oceans. Not only has the movement shed light on the importance of law enforcement reform in North America, but it has found its way into Fortune 500 C-Suites as well.
THE CURRENT STATE OF RACE AT THE EXECUTIVE LEVEL
If it was not quite evident that most executive roles among Fortune 500 companies are held by white men, here are the most recent statistics. Among 462 new board member hires in 2018, African-Americans account for just 11%.
Simply put, Black representation within boardrooms is, at most, minimal. This kind of statistic might seem odd at first glance, considering the countless studies that have been and continue to be released on the impact of diversity in the workplace. Most of these studies promote diversity and conclude that a diverse workplace is beneficial, if not essential, in many respects. One was conducted in 2003 when “Orlando Richard, a professor of management at the University of Texas at Dallas, and his colleagues, surveyed executives at 177 national banks in the U.S., then put together a database comparing financial performance, racial diversity and the emphasis the bank presidents put on innovation. For innovation-focused banks, increases in racial diversity were clearly related to enhanced financial performance.” Through studies like this one, it is clear that diversity is and forever will be a key element of any corporate setting and, thankfully, is becoming increasingly prioritized as time goes on. However, having visible minorities in the C-Suite still seems to be uncommon today. In fact, “37% of S&P 500 firms did not have any Black Board members” in 2019.
HOW TO COMBAT THE UNDERREPRESENTATION OF VISIBLE MINORITIES
In 2020 we find ourselves asking, why are the corporate boards of the Fortune 500 still dominated by white individuals? Some might say this is a product of Black communities having less direct access to education or local labour market opportunities. They may be right, but studies have shown that when these factors are mitigated, “Blacks remain substantially disadvantaged relative to equally qualified white males” at the point of entry to a firm (HBR, 2017). These results shift focus instead to the role of racial biases and discrimination within hiring decisions.
That said, there are ways to counter discrimination in recruitment and selection processes. Simply being aware and reminding ourselves of our racial biases is already a step in the right direction (albeit a small one). On a larger scale, the Employment Equity Act of 1995 (more commonly known as Affirmative Action for our neighbors to the south) that aims to “ensure no person shall be denied employment opportunities or benefits for reasons unrelated to ability” should continue to be enforced and further built upon going forward.
A BREATH OF FRESH AIR
Recently, I have been lucky enough to speak to a few consultants at a leading executive search firm to find out their perspective on this issue. The good news is that in the recent months, they are seeing an increase in demand for historically underrepresented candidates, particularly at the board level. While we have an incredibly long way to go to create a more diverse and inclusive corporate world, it’s a promising start.
Comments