However, businesses praising diversity do not always show as much contrast in the C-suite. This brings its own set of problems.
Implementing Corporate Diversity a Challenge
Recently, Travelers reported that some large companies face lawsuits for failing to reflect corporate diversity in top positions. Suits allege these companies only pay lip service to equity and inclusion. They seek to require more people of color on corporate boards and in top management positions.
However, Travelers reports that past suits of a similar nature were rejected. This is because courts generally do not see companies’ actions as a breach of fiduciary duties, even if company policies call for more internal diversity.
Even if courts do not mandate more equity and inclusion in a company, many businesses report wanting to diversify their workplace for good reason. Associates for Talent Development reported that when women make up over 30% of executive boards, those companies “significantly” outperform companies with fewer women executives. Additionally, companies with ethnically diverse executive teams outperform organizations without such representation.
Associations Now reports that the way businesses manage their leadership pipeline can help bring about greater corporate diversity. Often, women and people of color are not promoted at the same rate or to the same positions as their white male counterparts.
One way to address a company’s diversity is to look at who reports to corporate executives. Additionally, business leaders need to look for ways to mentor and develop people of different race, gender, and ethnic backgrounds. Providing more pathways for diverse candidates to achieve can help bring those candidates to more senior positions.
Whatever your business, the Keating Agency offers this blog because better information can help make better decisions. We hope you find it helpful.