As we head into 2024, diversity continues to be a significantly important matter in the corporate world. Over the past few years, we’ve seen some great improvements in statistics and legislation. But, is executive diversity really as better as it seems?

Research has consistently shown that diversity in the workplace is beneficial for innovation and profits. In 2018, the Boston Consulting Group found that, on average, companies with diverse management teams have 19% higher revenues and 9% higher EBIT margins than companies with less diverse leadership. Additionally, a 2020 report by McKinsey & Company titled, “Diversity wins: How inclusion matters,” claims that the case for more inclusion and diversity for business is stronger than ever. Their six-year study found that more ethnically and culturally diverse businesses are up to 36% more profitable than the least diverse companies. And, gender-diverse businesses are up to 48% more profitable. They also found that, at the time, about 50% of the firms in their study had made little to no progress when it came to increasing diversity. Some of these firms even had a decrease in diverse representation as time went on.

Statistics like these show how important diversity in employees, board members and executives is for companies today. Companies making decisions and providing for the public should have individuals who accurately reflect the many needs of a uniquely diverse general public. It is also clear that companies that embrace diverse backgrounds, ideas and skills drive creativity and innovation. This is where business thrives.

Despite the continuous push for diversity and its benefits, the reality of corporate boards shows a recent lack of representation. In 2023, the percentage of diverse new directors, of S&P 500 companies decreased by 5%, with 67% of new director appointments being filled by diverse individuals. The percentage of new directors who are women remained the same, as the past year, at 46%. The percentage of Black or African Americans, who made up 26% of new directors in 2022, dropped significantly, to just 15% in 2023. The overall diversity of S&P 500 companies did increase from 22% in 2022 to 24% in 2023. The increase in overall diversity has continued to rise over the past decades, but by less and less each time.

Despite the data showing several decreases in representation, nearly all S&P 500 companies are now transparent about their diversity statistics. As of 2023, 98% of these boards disclose their gender composition and 97% disclose their underrepresented minority composition.

Diversity and inclusion efforts will always be important to a company’s employees, clients and long-term growth. These efforts are part of a continuous initiative in the corporate world. We hope to see more accurate, equal representation in the near future.