Companies in the top 25% for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians — 15% higher for gender and 35% for racial and ethnic diversity. For every 10% increase in racial and ethnic diversity on the senior executive team, earnings before interest and taxes (EBIT) rise 0.8%.1
Companies that want to reap these benefits need to have leaders who recognize the potential of a diverse team. Leaders who actually seek out and appreciate the opinions, perspectives and ideas from a wide range of employees are more likely to behave inclusively and unlock the innovative capacity of their team.
The presence of women executives is associated with strong firm performance as measured by both gross and net margins.2 There is also evidence that female managers are better at engaging employees, by encouraging development, fostering a positive work environment and delivering consistent feedback and recognition.3
1 Vivian Hunt, Dennis Layton, and Sara Prince, "Diversity Matters," McKinsey, February 2015.
2 According to a Peterson Institute survey of nearly 22,000 firms from 91 countries.
3 Kimberly Fitch and Sangeeta Agrawal, "Why Women Are Better Managers Than Men," Gallup, October 16, 2014.
4 Éric Caron Malenfant, André Lebel and Laurent Martel, "Immigration and Diversity: Population Projections for Canada and its Regions," Statistics Canada, January 25, 2017.
5 Judith Lindenberger, "Diversity and the Workplace," Experience by Symplicity, 2017.
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