Diverse employees are often cut off from paths to the CEO’s office, a new study finds. One solution is to look at bias where those paths begin.
If associations want to diversify their staffs—and encourage their members to do the same—setting an example at the top is critical. But DEI doesn’t just include filling roles in the C-suite. How you manage your leadership pipeline also matters. That path often doesn’t go in a straight line, and many candidates are moved off of it early.
Some recent evidence of that dynamic comes from research announced last week by the Stanford Graduate School of Business. Researchers David Larcker and Brian Tayan studied the race and gender breakdowns of employees who report directly to the CEO at Fortune 100 companies. It may come as no surprise that they found the upper tiers of the C-suite tend to be white and male: Past studies have found that fewer than 10 percent of Fortune 500 CEOs are either female or nonwhite.
You need to not be satisfied with the natural sortings within your company.
But what Larcker and Tayan’s research reveals is just how closed off the pathway to the corner office is to diverse candidates. They found that women and ethnically diverse employees are much less likely to serve in CFO and other financial leadership roles—which are the ones most commonly connected to the CEO position.
That bias exacerbates an already exclusionary environment, suggesting that diverse candidates can only go so far into the C-suite.
“It’s good to have diversity in HR and general counsel, but if you as a leader are serious about promoting diversity within your leadership ranks, you need to not be satisfied with the natural sortings within your company,” Tayan said in a release about the research. “You need to figure out how to develop [diverse] people in the operations and profit-and-loss sectors.”
Addressing that gap, the Stanford researchers suggest, means thinking about DEI through the lens of your overall culture. Which C-suite positions are the most prized and which ones aren’t? Open conversation about that can identify problems in your leadership pipeline and help you start to address them. “There are some positions that are highly valued and more sought-after than others,” Larcker says. “Firms should be more transparent about that.”
It’s not the kind of challenge you necessarily need to face alone. Last year the Healthcare Businesswomen’s Association received a Power of A Summit Award from ASAE for its Gender Parity Collaborative, which is designed to address the disproportionate absence of women (and especially women of color) in executive roles in the industry. One problem the collaborative identified early on is the “broken rung”—the tendency of men to be promoted to leadership-track roles early in their careers, cutting off women from the C-suite well before there are any openings there.
One virtue of the collaborative’s model is that it compels participants to be honest about where they’re at: They’re asked to take part in in-person meetings and data-gathering sessions that ask directly about how they’re factoring diversity into hiring managers in general. It builds a sense of accountability around a process that the Stanford research suggests has been seat-of-the-pants. As Tayan says, “You look at your own C-suite and say, ‘I’m happy with it,’ but are you happy with the potential for everyone to reach the CEO position?”
If the answer to that question is “no”—and the data suggests it usually is—now is a good time to reassess your hiring and promotion processes.
How have you explored diversifying your leadership pipeline? What efforts have worked best? Share your experiences in the comments.