INTERNATIONAL - A lack of black executives in the jobs that most often lead to the C-suite risks leading to an even greater decline in African American chief executives, a new study finds.
Fewer than 10% of senior executives in so-called “profit and loss jobs,” those that operate units, at the largest U.S. companies are black, according to an analysis by executive recruiter Korn Ferry. The study was conducted for the Executive Leadership Council, which advocates for promotion of black executives into the top executive ranks and boardrooms.
Black executives surveyed also say they’re pushed into supporting roles and have to take on riskier assignments to get promotions.
“The disproportionate number of people who happen to be black who are in support roles versus P&L is dramatically out of balance,” said Michael Hyter, a Korn Ferry managing partner and one of the authors of the study. “The black executive seems to be numerically in decline compared to all the other groups.”
As big investors such as BlackRock and State Street Global Advisors have been pushing companies to add more women to boards, fewer initiatives have focused on people of color. European countries pushing gender quotas for corporate boards, and a new California law setting minimum numbers, force companies to find more women to beat regulatory penalties. There are no regulatory requirements to add people of color in the boardroom or c-suite.
The last all-male board in the S&P 500 added a woman this year and women make up 24% of directors and about 5% of CEOs. Black directors made up only about 1% of board members in the S&P 500, and 37% of boards did not have a single black member, according to an analysis by Black Enterprise magazine. About 1% of S&P 500 CEOs are black. Interim Bed, Bath & Beyond Inc. CEO Mary Winston, who had been the only black, female CEO in the Fortune 500 since her appointment in May, will step down Nov. 4.
“In the circles I’m in there is absolutely a greater focus on gender, and I don’t begrudge that,” as long as black candidates are also getting equal consideration, said Skip Spriggs, CEO of the Executive Leadership Council and a former top human resources executive at TIAA, Boston Scientific Corp., and Cigna Corp. He said in his own career he was steered toward HR roles, which while important and influential, were less likely to earn him a CEO job.
Black executives who did get operating jobs said they faced headwinds such as pre-conceived notions of their abilities and exclusion from corporate social circles, according to the study, presented Thursday at the Executive Leadership Council’s CEO GameChanger conference in Washington. They also said they were asked to take on disproportionately risky projects, which had a high likelihood of failure, to prove their abilities.
“A lot of time that activity at the bottom tends to dominate the discussion,” said Hyter from Korn Ferry. “Where it really counts the most is black people who are in position for significant P&L responsibility.”