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iversity in STE A M www.diversityinsteam.com
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espite constituting 35 percent of the population, historically underrepresent- ed racial and ethnic groups account for only seven percent of CEOs. Although numbers have increased - historically underrepre- sented racial and ethnic groups made up two percent of CEOs in 2000 - they contin- ue to be significantly underrepresented in the C-suite. Part of the reason there are still so few historically underrepresented racial and ethnic executives in the C-suite is because non-white corporate executives continue to have a negative connotation among custom- ers and shareholders. This is demonstrated by a more negative market reaction when historically underrepresented racial and ethnic executives are selected than when white executives are chosen. For historically underrepresented racial and ethnic executives, some C-suite situa- ions might provide greater hurdles, with a higher risk of failure. The pattern of com- panies hiring historically underrepresented racial and ethnic executives as CEOs when the company is suffering short-, medium- or long-term deterioration exemplifies this. Despite the fact that historically un- derrepresented racial and ethnic groups account for slightly more than a third of the population, when historically underrepre- sented racial and ethnic executives advance through roles that feed into the C-suite, few break through the corporate glass ceiling. Here are five areas to help businesses align their C-suite with the population's racial and ethnic makeup.
Strategic Planning
Organizational leaders should consider communicating their commitment to racial/ ethnic diversity and the importance of ra- cial/ethnic leadership diversity to corporate performance to shareholders. This can be done by explicitly including racial/ethnic di- versity in the C-suite as a focus area in their strategic plan and communicating this plan to shareholders, in order to promote racial/ ethnic diversity within the organization without risking market retaliation.
Ways to Make the C-Suite More Diverse
By Mikal Hayes
5
Broaden the Talent Pipeline
Although corporate boards of directors do not resemble the racial and ethnic make-up of the population, they do have higher rates than the C-suite. Organizational leaders should leverage their boards of directors who are from historically underrepresented racial and ethnic groups for recommenda- ions for top openings.
CFO Experience
Prior to their appointment, almost 90 per- cent of internally promoted CEOs worked in a position with profit and loss (P&L) respon- sibilities or had CFO expertise. The position of CFO is the least ethnically diversified in the C-suite. Companies that are serious about racial/ethnic diversity must assure racial/ethnic representation in this area.
Executive Coaching
Provide and promote avenues for histor- ically underrepresented racial and ethnic executives in positions that feed into the C-suite to get executive coaching and men- torship from members of senior leadership.
Look Small
Smaller company boards of directors may be better positioned to choose historically underrepresented racial and ethnic execu- ives than bigger company boards. Larger corporations might turn to smaller corpora- ions for possible C-suite prospects. Because persons from historically under- represented racial and ethnic groups make up just approximately seven percent of CEOs, boards may wish to investigate differ- ent strategies to match the C-suite with the racial and ethnic make-up of the population. One place to start is to look past the bias. Encourage strategies and objectives that prevent placing historically underrepresent- ed racial and ethnic executives in vulnerable leadership positions, while encouraging the appointment of historically underrepresent- ed racial and ethnic executives when the organization is functioning well.
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