Hiring Black C-Suite Executives Increases Business Profitability

By Sabrina Lynch

  • A medium-sized firm who appoints a Black executive will experience a 3.1% increase in market capitalization within three days of an announcement
  • The number of Black Fortune 500 CEOs dropped from 6 to a pitiful 4 

Black leaders have the unique midas touch to grow a corporation’s profits. New research revealed that when companies put African-American leaders at the helm, stocks jump and stronger market footholds are made. In fact, 93% of the Black CEOs surveyed had advanced degrees compared to 53% of white CEOs. In addition, leaders of Color have an additional 1.6 years of education and are more likely to have an elite degree from a top university. A medium-sized firm who appoints a Black executive will experience a 3.1% increase in market capitalization within three days of an announcement.

Why This Matters: This increase in profitability has been put down to investors’ reassurance in the expertise, industry instincts and resumes of Black executives, whose work experience is oftentimes better than their white counterparts. Despite the progress being made in representation of People of Color in corporate America, it is nowhere near the headway needed to transform a C-Suite into a safe space for equity for Black employees. 

Black CEOs of Fortune 500 companies have fallen down to only four…FOUR. Compare this to 86% of white men dominating the corporate ecosystem right now. It’s no secret that a lot of qualified Black executives do not feel valued in the workplace due to racial disparities in compensation and implicit biases they experience. Now, blue-chip organizations really need to up the ante to prove to the vast pool of Black excellence that joining their firms would be worth their while and time.

Situational Awareness: Recruiting Black executives is the easy part. Keeping said talent is the hard task because of the historical ways People of Color have not been supported in their career trajectory. Black CEOS are more likely to be appreciated for possessing different types of intelligence which can be put into practice on the job, such as a better understanding of diverse customer markets and employee base. If the glass ceiling remains sealed by lack of representation, then there is no motivation for Black talent to pursue advancing their professional journey in a company. Due to their business viability,  Black leaders have more options and resource access to start their own business ventures.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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