Huge Gaps in Diversity of Business Leadership – A Systemic Issue Needing a Systemic Approach, Part 1

Many people in the industry continue to state that our corporate leadership is getting more and more diverse, touting the increase in women, people of color and LGBTQ people reaching the highest echelons of business leadership. In addition to these optimistic statements being heard nationwide, they are frequently spread across my local area of Raleigh – Durham – Chapel Hill, North Carolina, often called the Triangle. We are a leading center for the high tech, health care, pharmaceutical and education industries.

So I was in for a shock when I received my November 22, 2019 Triangle Business Journal. This issue featured the 50 fastest growing privately-held companies in the Triangle with brief descriptions and photos of the CEOs. As I went through the first several, I noticed how all the photos starting looking similar; and then I decided to count them. These 50 fastest growing companies are led by 44 white men, 3 white women, 2 Asian men and 1 black woman. What extraordinary optics! I immediately reached out to share this with an area consultant I often collaborate with, Al Sullivan of Inspirus Consulting, to discuss these numbers.

Even as I was drafting this blog in mid-December, a New York Times article by Lauretta Charlton titled “Few blacks to be found at the top of the corporate ladder,” (link) also appeared in our Raleigh News and Observer. She reported that there are only four black CEOs of Fortune 500 companies (that’s less than 1%,) down from 7 less than a decade ago.

One recent report by the leading consulting company McKinsey & Company (link to the study) completed an extensive study across 222 companies employing more than 12 million people. Some of their findings include:

• Women remain significantly underrepresented in the corporate pipeline from the outset. Even though women represent 57% of college graduates, fewer women than men are hired at the entry level.

• White men are in 36% of the entry level roles. That increases to 47% of management, 61% of vice presidents and 67% of the C-Suite.

• Men of color are somewhat underrepresented compared to white men, 16% of entry roles, 16% of management, 11% of vice presidents and 12% of C-Suite.

• White women fare worse; 31% of entry roles, 26% of management, 23% of VPs and 18% of C-Suite.

• And women of color are far under-represented in leadership roles, declining from 17% of entry roles down to 11% of management, 6% of VPs and only 3% in the C-suite.

Is this what the C-Suite is supposed to look like in today’s world? (Photo in the public domain)

Another way of looking at the data is a percentage under-represented or over-represented they are in senior leadership compared to entry level jobs.

All things being equal (and we know they are not), the ideal fair state would be each particular demographic being the same percentage of the workforce across all levels from entry level to vice president to c-suite.  Looking at the data this way:

  • White men are over-represented in VP and c-suite roles by 91%
  • Men of color are under-represented in VP and c-suite roles by 38%
  • White women are under-represented in VP and c-suite roles by 42%
  • And women of color are under-represented in VP and c-suite roles by 77%!

Clearly we are not moving along in the area of diversity in career progression as we should. Why might this be happening, and systemically, what can be done?

And now  here is part 2:  Five Tactics to Address the Systemic Issue of the Lack of Diverse Business Leaders.

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Blog author Stan Kimer is a diversity consultant and trainer who handles all areas of workplace diversity and with a deep expertise in LGBT diversity strategy and training. Please explore the rest of my website and never hesitate to contact me to discuss diversity training for your organization, or pass my name onto your HR department.  [email protected]

Diversity Councils and Employee Resource Groups – Not “either / or,” but “both / and”

Blog author Stan Kimer enjoys facilitating the Employee Resource Groups and Diversity Councils best practices sessions at the National Diversity Council’s DiversityFIRST certification classes.

This past July, the large global public accounting firm Deloitte caused quite a stir in diversity circles when its chairman shared that it was going to disband its employee affinity groups (often call employee resource groups – ERGs or business resource groups) and replace them with inclusions councils. The logic is that the inclusion councils can still focus on underrepresented groups but also involve many more white men in the diversity and inclusion discussion. (Link to an article about this announcement from Diversity Inc.)

A few weeks after Deloitte’s announcement, Erika Irish Brown, Global Head of Diversity and Inclusion at Bloomberg LP wrote a rebuttal titled “Why employee resource groups still matter” (LINK). Ms. Brown shared that their ERGs add significant value to their business and focus on Bloomberg’s five key pillars of commercial impact, recruiting, leadership development, marketing and communications, and community engagement.

I myself now serve on the faculty of the National Diversity Council’s DiversityFIRST Certification Class and two of the modules I facilitate are Best Practices in Employee Resource Groups and Best Practices in Diversity Councils. I have now added a discussion about Deloitte’s recent actions to the class.

I strongly believe that diversity councils and ERGs are complementary, and both structures can co-exist and work together. It does not have to be one or the other. Here are 5 reasons why both structures are needed and should co-exist.

1) Diversity Councils are management sponsored and led with supporting the corporate business goals through diversity and inclusion as it main objective. ERGs are employee led, and though ERGs very often support the business, the primary impetus is addressing the workplace needs of the various diverse constituencies.

2) There are still many issues around underrepresented groups within American business, and so a focus and “safe space” for diverse communities to discuss their issues and collaborate to grow professionally are really needed.

ERGs can very effectively represent companies at constituency events like “OutRaleigh!” where I celebrated my 60th birthday.

3) You do not need to dissolve ERGs and form new inclusion councils if the goal is to increase involvement of white men. One best practice is to have a Men’s ERG so everyone is included in the ERGs structure. And white male leaders can be advocates, advisors, mentors and executive sponsors of the ERGs. (See my past blog from 2016 “Diversity and Straight White Men – 4 Key Thoughts.”)

4) ERGs are still a very effective way to connect a business with diverse community outreach and philanthropic activities and constituency markets.

5) Structured properly, ERGs and Diversity Councils can cross-pollinate and work closely to assure their goals and activities are aligned.

Often leaders make errors in trying to replace one structure or solution with another when actually the two co-exist and support each other. And so it is with Diversity Councils and Employee Resource Groups.