McKinsey: More diversity, higher ROEs … any questions?

Punch line: Between 2008 and 2010, companies with more diverse top teams were also top financial performers. That’s probably no coincidence.

* * * * *

Excerpted from the McKinsey Quarterly Article’s, “Is there a payoff from top-team diversity?”

crayons1

There are many reasons companies with more diverse executive teams should outperform their peers: fielding a team of top executives with varied cultural backgrounds and life experiences can broaden a company’s strategic perspective, for example.

To understand whether reality is consistent with theory, McKinsey looked at the executive board composition … [and] the findings were startlingly consistent: for companies ranking in the top quartile of executive-board diversity, ROEs were 53 percent higher, on average, than they were for those in the bottom quartile.

While it could not quantify the exact relationship between diversity and performance in such cases, McKinsey did offer them as part of a growing body of best practices.

These successful companies are simultaneously pursuing top-team diversity, ambitious global strategies, and strong financial performance.

Edit by JDC

One Response to “McKinsey: More diversity, higher ROEs … any questions?”

  1. John Carpenter Says:

    Sorry…I could not help but think of the Republican Party leadership here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s