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Several years ago, Ryan Buchanan attended an event with about 90 business executives in the Portland, Ore., area where his company is based, and had what he calls an "aha" moment.
Looking around, the CEO of digital marketing agency Thesis could see that nearly every single one of the executives there was a white man.
"I was part of the problem because I hadn't been intentional about building relationships with entrepreneurs of color," Buchanan said. "I looked at my own company and realized we'd also not been intentional about racial diversity and [gender] equity."
So, with the help of a colleague, Buchanan founded a nonprofit that provides college scholarships to students of color, mentors young professionals from diverse backgrounds and invests in resource groups for LGBTQ workers.
As for his own company, 42 percent of his 260 employees are now people of color, while 61 percent are women. His "aha" moment was what started it all.
"We changed our hiring practices. It was like that pebble in the lake that helped us start creating relationships with folks who don't look like us. It should have happened a decade earlier," he said.
‘It was like that pebble in the lake that helped us start creating relationships with folks who don’t look like us. It should have happened a decade earlier.’
—Ryan Buchanan, CEO of digital marketing agency Thesis.
Diversity, equity and inclusion—or DE&I—describes the efforts institutions take to create a more welcoming environment for people of less-privileged identities. It refers not just to women and people of color, but also to people with disabilities, military veterans, and LGBTQ people. And not just to hiring, promoting and pay equity, but also to ensuring workplaces treat all employees fairly—which includes eradicating harassment and discrimination.
Much has been written about the laws, regulations, employer policies and advocacy groups designed to support DE&I in the workplace. And much has been documented about the progress or lack thereof that U.S. companies have made when it comes to leadership positions, especially midlevel managerial jobs.
But when it comes to DE&I in the C-suite—those top four or five jobs that tend to have the most influence and earn the most money—many of the faces look the same:
Diversity Lags Among Fortune 500 CEOs
While progress has been made since 1972, when Katharine Graham of The Washington Post became the first Fortune 500 CEO who was not a white man, the overwhelming majority of CEOs at Fortune 500 firms in 2021 remain white men.
As of last year, 86 percent of Fortune 500 CEOs were white men, according to data provided exclusively to SHRM by Richard L. Zweigenhaft and G. William Domhoff, professors emeritus who write about diversity among the "power elite"—those with significant financial or political influence in the U.S.
Zweigenhaft and Domhoff have studied the emergence of the “New CEOs”—those who are not white men. Most of this emergent group is made up of white women, who held the top posts at 34 Fortune 500 companies last year, including the fourth and sixth largest—CVS Health and General Motors, respectively.
In the following interactive chart, “New CEOs” are broken down into Black men, Latino men, Asian men, white women, Black women, Latina women and Asian women. Of note, no Fortune 500 company had a Latina CEO in 2021. Hover over each square representing a “New CEO” for more information.
The last three years have also seen little change in Fortune 500 CEO demographics. In 2019, 85.6 percent of Fortune 500 CEOs were white men. That share rose to 86.2 percent in 2020 and was 86 percent in 2021.
The barriers to DE&I in executive circles are those one might expect: Promotions and hiring decisions are often based on relationships and "identity bias"—the sense that the more that colleagues are "like me," the better they'll fit in. Adjectives traditionally used to describe a successful executive—such as aggressive, assertive, and take-charge—are typically associated with men. Networking events like the one Buchanan attended years ago tend to be assembled based on connections.
Big corporations often recruit from colleges with marquee names—where money and connections help gain entry—and from within companies already on the
Fortune 500 list.
Even though they tend to look in all the same places for talent, according to Gartner, the No. 1 reason HR managers gave for the lack of diversity in executive roles was "not having enough diverse leadership talent in the pipeline." Korn Ferry also pointed out that too few employees from diverse backgrounds are given the type of managerial jobs early on that would allow them to oversee financial results, such as profit and loss (P&L) benchmarks. Success at meeting such benchmarks is what typically leads to executive promotions.
And at companies that discourage remote work—especially for executives—trying to find a diverse candidate for an executive role in Salt Lake City, versus Washington, D.C., is much harder because of Salt Lake City's demographics, said Brian Breinholt, CHRO for Sorenson Communications LLC, a Salt Lake City-based company that provides communication devices for people with hearing disabilities.
The business world has made strides in diversifying the C-suite.
But according to statistics, it hasn't come far enough.
Women make up 56 percent of front-line employees but only 29 percent of the C-suite, according to the Gartner 2021 Leadership Progression and Diversity Survey, which queried 3,500 employees across 24 industries on the topic in February 2021. Black and Indigenous people and other people of color (BIPOC) make up 31 percent of front-line workers, but only 17 percent of the C-suite.
Meanwhile, Out Leadership, a business network that helps companies place LGBTQ+ leaders in executive positions, reports that fewer than 1 percent of Fortune 500 CEOs identify as LGBTQ.
The top reason HR managers gave for this lack of diversity in leadership roles was "not having enough diverse leadership talent in the pipeline," reported Gartner, whose researchers also interviewed more than 100 corporate HR leaders.
The people who fill those leadership pipelines get there because of a number of advantages, among them: whether they went to college, where they went to college, whether they receive internships, the connections they make, the mentors they have, and their access to career development programs. Those advantages are often based on one's background, income and racial privilege.
Those advantages—or lack of them—struck Ryan Buchanan the day he attended a conference of business leaders in Portland, Ore., and realized that of the 90-some executives there, nearly every single one was a white man.
The steps he's taken to include more women; Black and Indigenous people and other people of color; and LGBTQ people in top leadership roles throughout the Portland area reveal that achieving diversity in the C-suite requires change on several levels.
Buchanan—CEO of digital marketing agency Thesis—co-founded two nonprofits that provide college scholarships to students from underrepresented backgrounds.
He reached out to some 100 executives he knows in the area and won commitments from them to support his nonprofits by providing internships and mentorship to a diverse candidate pool.
His nonprofits also provide career and leadership training for a diverse group of young professionals—who are typically 22 to 35 years old—which includes a five-week course on topics like education, insurance products, retirement savings and building wealth through home ownership. The organizations also invest in resource groups for interns and young professionals from underrepresented backgrounds.
However, a confluence of recent events, especially in the past few years, seems to have lit a fire under executives.
The #MeToo movement gave women a platform to speak up about top executives' sexual advances and the way leadership doors either closed or opened for them as a result. The 2020 Black Lives Matter protests in response to the killings of Ahmaud Arbery, Breonna Taylor, George Floyd and other Black Americans once again thrust the issue of racial inequality right in front of executives as companies felt compelled to make statements or, in some cases, donations. And the increasing number of LGBTQ executives publicly opening up about their sexual orientations and gender identities has started to break down barriers to the C-suite, those interviewed say.
For instance, Apple CEO Tim Cook publicly came out in 2014, revealing his sexual orientation in an open letter published in Bloomberg Businessweek. This made him the first openly gay CEO of a Fortune 500 company.
One of his chief reasons for coming out, Cook, said, was to be a role model for rising executives. He also reflected on how being gay benefited his ability to lead the world's largest company.
Add to all of this the fact that Generation Z employees now coming into the workplace tend to be especially passionate and vocal about inclusiveness and fair treatment.
‘All these conversations started to bubble up, especially with this generation that grew up with social media and doesn’t have a problem with letting you know how they think. Those conversations sort of crescendoed and became front and center.’
—Travis Foster, chief legal officer at WorkShield.
All of these developments stirred an awakening in company leaders, said Travis Foster, chief legal officer at WorkShield, which provides companies with third-party investigations of harassment and discrimination complaints.
"You had this explosion of social issues that were now very important to the younger employee population," Foster said. "All these conversations started to bubble up, especially with this generation that grew up with social media and doesn't have a problem with letting you know how they think. Those conversations sort of crescendoed and became front and center ... and leaders had to hit pause."
Buchanan also attributes the C-suite's renewed attention to diversity and equity in leadership to the demands of a younger generation.
"They have expectations that companies will represent their social justice values and values ... around issues important to" diverse communities, said Buchanan, whose nonprofit primarily supports young college students and professionals from underrepresented backgrounds. "There is a sense that if we're complicit, if we're silent, especially as a white male founder, then not saying anything or not taking any action ... is a sign that we're stuck in the past."
Read the first installment in the series: The Evolution of the Executive.
Read the second installment in the series: The 'Professional Executive' Emerges.
Read the fourth installment in the series: The Empathetic Leader.
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