Statistics don’t lie: Corporate America lacks minorities, women
The statistics don’t lie. The corporate leadership ranks are nearly devoid of people of color and women.
Right now, there are only 33 women Fortune 500 CEOs. That equates to an embarrassingly low 6.6 percent. Worse still, Mary Winston is the ONLY CEO woman of color, and she is merely serving in an interim post. If you don’t include Winston, there is an abysmal four black Fortune 500 CEOs and a paltry 11 Latino Fortune 500 CEOs. Yet, the lack of diversity and inclusion doesn’t end there.
According to McKinsey and Company, only one in five senior leaders in corporate America is a woman. One in 25 is a woman of color. It’s not much better in the boardroom: not even one in five board members are women and just 16 percent of board seats are occupied by people of color.
As chair of the House Financial Services Subcommittee on Diversity and Inclusion, I have been surprised by the broad, bipartisan consensus that we need to improve these numbers and the acknowledgment that diversity and inclusion are good for business. It is clear to me: the private sector needs to be more intentional when it comes to breaking down the historic and systemic barriers that prevent women and people of color from climbing the corporate ladder.
But we need more than lip service. We need action, and I am determined to do exactly that.
By holding corporate leadership accountable for what they say and do. Instead of more “feel good mottos,” corporate America needs to create strategies to foster an inclusive workplace and retain a diverse workforce. That’s because our nation faces large and complex problems, and divergent perspectives are necessary to formulate comprehensive and multi-faceted solutions.
Congress can help move the needle by setting the example. We need to explore proven strategies such as more sponsorship, mentorship, and internship programs for women and minority Americans. Furthermore, Congress needs to champion practices that champion women’s advancement at work, including federally-mandated paid parental leave, equal pay for equal work, pay equity audits, and unequivocal support for bias and diversity training.
Another proven “championship” strategy is advancing practices that provide people of diverse backgrounds and perspectives an opportunity to be in the room like the National Football League’s (NFL) Rooney Rule. Under the groundbreaking rule, the number of black coaches and general managers has expanded dramatically since its adoption in 2003. I was so inspired by the Rooney Rule’s success, I introduced H.R. 281, the Ensuring Diverse Leadership Act, also known as the Beatty Rule, a piece of legislation that guarantees that at least one gender-diverse and ethnically-diverse candidate is interviewed when there is a vacancy among the Federal Reserve Regional Bank presidents.
I believe we can take the Beatty Rule a step further—considering it was unanimously passed by the House of Representatives recently—and enact legislation that applies the Beatty Rule to investment advisers and asset managers to ensure diverse- and women-owned investment advisers have an opportunity to manage more than the combined one percent of the $70 trillion industry that they currently do. Like the NFL before, the asset management industry is a relationship-driven business that has historically and overwhelmingly excluded women and people of color.
This is just the tip of the iceberg, and I look forward to continuing to spearhead the work in Congress with Democrats and Republicans to harness the power of diversity and inclusion to unlock greater American economic competitiveness.
Women and minorities are key to that mission.
Why am I so confident?
Research shows that companies in the top-quartile for gender diversity on their executive teams were 21 percent more likely to have above-average profitability than companies with less diverse workforces. Moreover, companies in the top-quartile for ethnic and cultural companies were 33 percent more likely to outperform on profitability.
As I said: the statistics don’t lie.
Beatty represents Ohio’s 3rd District and is chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion.
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