Fundamentals of Management, 8th ed

strategic leadership

The capability to

understand the

complexities of both

the organization and

its environment and

to lead change in the

organization to

achieve and maintain

a superior alignment

between the

organization and its

environment

346

Part 4: Leading

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LEADING THE WAY

Diversity Still Lagging in the Boardroom

“It’s been proven again and again,” says Carl Brooks,

CEO of the Executive Leadership Council, a network

of senior African American executives, “that compa-

nies with board members who reflect gender and

ethnic diversity also tend to have better returns on

equity and sales.” According to Marc H. Morial,

CEO of the National Urban League, which promotes

economic empowerment for African Americans, a

minority presence on corporate boards is also

necessary to protect the interests of minority consu-

mers and other stakeholders: “African American

voices and perspectives,” he argues, “are needed

on corporate boards to ensure that business deci-

sions affecting Black America are both responsible

and sensitive to the needs of our communities.”

Unfortunately, says Morial, “African Americans

still represent a miniscule fraction of board-level cor-

porate leadership in America.” Citing a recent study

by the Executive Leadership Council, Morial points

out that the number of blacks on Fortune 500 boards

has actually declined in recent years: Even though

blacks comprise 13 percent of the U.S. population,

representation

on

corporate

boards

stands

at

“a meager 7 percent.”

The same trend was confirmed with the release

of the U.S. Senate Democratic Hispanic Task Force

report on minority and women representation on

Fortune 500 boards and executive teams (CEOs

plus their direct reports). Here are some of the

survey’s findings:

• Women comprise 18 percent of all board mem-

bers and just under 20 percent of executive team

members (roughly one in five). Those figures, of

course, are far below the 50-percent proportion of

women in the population.

• Minorities comprise 14.5 percent of all directors—

about one out of every seven—and an even

smaller percentage of executive-team members.

That’s less than half of their 35-percent proportion

of the population.

• Although African Americans boast the highest

minority representation on boards—8.8 percent—

that’s equivalent to only 69 percent of their total

©

A

ndrey

Popov/

S

hutterstock.com

Most experts agree that diversity among group members can contribute to better decisions and

solutions. But while many organizations strive to promote diversity within teams and work groups

such as this one, most boards of directors of large businesses still have relatively little diversity.

(Continued)