US shareholder advocacy NGO As You Sow’s new report has shown a “significant correlation” between higher percentages of Black, Indigenous, and People of Colour in management positions and increases in eight standard financial metrics. The evaluated metrics included enterprise value growth rate, free cash flow per share, income after tax, long-term growth mean, ten-year price change, mean return on equity, return on invested capital, and ten-year total revenue compound annual growth rate. As You Sow said the analysis of 1,641 US based and publicly traded companies’ key findings add “meaningful insight” to a growing body of evidence that links financial benefits to a diverse management team, as well as making a “clear business and investor case for diversity as a material factor in financial success”. Andrew Behar, CEO at As You Sow, said: “A diverse workforce led by a diverse management team performs better financially. These findings empower corporate boards and investors who want to outperform financially to increase workplace diversity, racial justice, and equity as core business practices and push back against unfounded attacks.” The NGO’s Workplace Equity Programme Manager, Meredith Benton, added that the report’s findings highlight “how important it is for investors to have access to data on manager and board diversity, as well as hiring, promotion, and retention rate”.
The analysis of 1,641 U.S. based and publicly traded companies between 2016-2022 strongly indicates that a #DiversityBenefit exists and that companies are incentivized to be attentive and proactive in capturing it. https://t.co/TH7pTelx59
— As You Sow (@AsYouSow) November 30, 2023
