Corporate America’s Boards are a Little More Woke
- In 2018 African-Americans have joined five high-profile boards
- The market cap for the publicly-traded companies totals $499.3 billion
J.P. Morgan (JPM +1.37%), AirBnB, Uber, Netflix (NFLX +1.21%), and Etsy (ETSY -0.50%) all added African-American executives to their boards in Q1. Ken Chenault, Ursula Burns, Mellody Hobson, Susan Rice, and Edith Cooper all joined the respective boards of these companies. Are corporate America’s top companies finally turning the corner in diversifying their leadership?
Why This Matters: The call for diversification in corporate America is as pronounced as ever. There’s research showing the many benefits of diversity in thought among corporate leadership. Research from McKinsey and MSCI shows companies with higher levels of diversity at the board level, are more likely to have strong financial performance and fewer instances of poor corporate governance.
A concerning development is there isn’t a consensus across boardrooms on the value-add of diversity. A PwC survey of 900 board directors found 24% of directors don’t believe racial diversity has an impact on diversity of thought within boardrooms.
Situational Awareness: While these are fantastic board appointments, there are still too few African-Americans at the top of U.S. corporations. Only three African-American CEOs are leading Fortune 500 companies. The Academy of Management’s research shows top white male leaders tend to become less helpful to other workers after the appointment of a minority CEO. There is a lot more work to be done to diversify the upper ranks of corporations across this country.
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