While Some Corporate DEI Progress Has Been Made, Real Growth Remains Low, Especially in Black Leadership Roles

A scarce 3% of Fortune 500 firms’ diversity data is available to the public, research shows.

Data also shows around 81% of CEOs of large companies are white men, compared to just 3.2% who are Black, based on a recent report.

And the number of Black CEOs has shrunk in recent years. Per BLACK ENTERPRISE, there will be seven Black Fortune 500 CEOs when Chris Womack achieves that status with Southern Company on May 24.

Figures reveal a bright spot is search engine giant Google boosted representation of Blacks companywide two times more than their overall employee representation in 2022 from 2021. However, only 19% of technology companies responding to the new survey by Big Four accounting firm KPMG have people of color in leadership roles.

While the goal is to lift that number to 25% by 2025, the numbers reveal that much more work is needed.

The push comes as a result of pressure put on U.S. companies to boost their DEI practices more aggressively. And it comes nearly three years after the George Floyd murder and subsequent national protests linked to systemic racism.

The KPMG survey indicated 71% of respondents had taken many DEI-related actions since 2020. However, a measly 12% reported making significant changes in their companies’ DEI profiles.

Elena Richards, KPMG U.S. Chief Diversity, Equity, and Inclusion Officer, surmised in the survey what may be needed to help move the DEI needle in the corporate world.

“Although measurement is critical, equally important is the employee experience of DEI as the centerpiece of a company’s efforts. Organizations should do everything they can to ensure employees’ trust that leadership is constantly scanning the landscape for effective practices and that they understand and celebrate everything that makes employees unique.”

Richards has more than 20 years of experience in human resources, with a heavy emphasis on diversity strategy and consulting, talent management, succession planning, development, performance management, and recruitment. Partnering with KPMG’s management committee and board of directors, she helps advance the firm’s Accelerate 2025 strategy. That commitment is geared to attract, retain, and advance underrepresented talent.

BLACK ENTERPRISE connected with Richards via email regarding DEI.

Why are so few Black professionals in leadership roles, including CEO positions, as opposed to White men?

Change doesn’t happen overnight, and even the organizations that have made demonstrable progress realize that current efforts are only the beginning stages towards meaningful change. As organizations continue to put various barriers of change under a microscope – such as a greater focus on internal reorganization than DEI efforts, lack of knowledge on how to proceed, insufficient funding and investments, potential exposure to legal, regulatory or compliance risks, and lack of leadership commitment – more opportunities will arise to tap into the pipeline and create opportunities for underrepresented talent (including Black talent) to develop and lead their organizations. It can be highly beneficial to track, from a DEI perspective, who is applying, who is getting considered, and who is ultimately being hired.

Google is among the major tech companies doing a better job of boosting black representation. What will it take for other companies in such industries as technology and financial services, such as banking, to boost the number of Blacks in executive and mid-management positions?

Equity recognizes that an organization might need to intervene and provide support in different ways for different groups – and this support may also vary across different industries and different organizations within those industries. For example, organizations may consider targeted “Path to Leadership” efforts that focus on career readiness and sponsorship from senior leaders. These efforts can be augmented to fast-track development opportunities for “ready now or ready soon” individuals. Another example is increasing rigor for succession planning to increase appointments from underrepresented groups. These efforts ultimately transform the leadership pipeline and succession planning process to track, evaluate, and develop talent that may not have been previously considered.

Research as recent as 2021 has shown stunningly less than half of all of the business leaders are executing a fully developed DEI strategy for their full-time employees. That great of a percentage makes it harder for Blacks to move up the corporate ladder. What must companies do to make a sustainable change?

If companies don’t prioritize their DEI strategy, they will continue to do things as they’ve been done before, and it will become increasingly difficult to drive change from the top-down. Measuring progress has continued to be a driver of change with DEI strategies. There is value in tracking the same metrics over time, but organizations should also consider whether it is necessary to evolve what they measure to include new learnings and current challenges into consideration.

In 2023, what actions in such areas as recruitment need to be taken by U.S. companies to truly boost the number of Black men and women in decision-making positions?

Some tactics across recruitment and leadership development that have proven effective include participation in targeted college recruitment programs and robust mentoring programs for underrepresented talent. As an example, KPMG has taken a unique approach to accessing student talent, particularly underrepresented talent, through its recent participation in an HBCU Showcase with The Armory.

Moreover, KPMG offers four ideas here that might help companies make qualitative progress with their DEI efforts.