After the collapse, Florida Gov. Ron DeSantis, a possible presidential candidate, told Fox News viewers that the bank’s concern “is with diversity, equity, and inclusion (DEI) and politics and all kinds of things … their core mission.” An echo chamber of Fox News hosts and guests followed this lead, with Tucker Carlson pontificating that DEI is the reason big banks are “increasingly incompetent,” and Missouri Senator Josh Hawley tweeting “SVB = too awake to fail.”
The attack on diversity policy goes beyond the banking failure blame game – it leads to an overall critique of corporate America’s right to focus on DEI. In early March (on International Women’s Day), Republican Congressman Mike Collins of Georgia blamed several rail derailments on the policy of DEI Norfolk Southern, which he said “directs resources away from important things like greasing wheel bearings.”
Here’s the irony: For all the corporate American mission statements around DEI (including the SVB website), there hasn’t been enough real progress for women and people of color, especially at the top.
When corporate marketers bombard us with messages to “celebrate” women’s achievements during Women’s History Month, there is nothing to celebrate. The numbers are still troubling: Only 10% of Fortune 500 companies have female CEOs — and less than 1% have women of color at the helm. The C-suite, the launchpad for the highest roles, is only 26% women—and 5% women of color.
“I’m often the only African-American woman in the boardroom or the C-suite,” said Rosalind Brewer, CEO of Walgreens Boots Alliance. “It’s changing but not fast enough.”
In fact, Fortune 500 boards “have taken a step back when it comes to diversity,” according to Heidrick & Struggles. The company’s 2023 US Board Monitor report notes that by 2022, 40% of new Fortune 500 director seats will be women, down from 45% in 2021, and 34% will go to racial or ethnic minorities, down from 41% in 2021.
Venture capital funding, which is essential for building new businesses, looks even more bleak: Less than 2% of venture funding goes to women—down from a few years ago. Black and Latina women received 0.43%. If we follow the rules of mathematical rounding, the number is approximately zero.
These numbers are bad news for the economy. Research shows that adding multiple faces to decision making is good for business. The most diversified companies typically outperform their less diversified peers in terms of profitability. It makes sense: The added perspective of a team’s diverse experiences and backgrounds enriches the conversation and broadens the lens of decision-making.
In venture capital, female founders and CEOs often have a better track record than men, with Pitchbook data showing that women-led companies exit (go public or find a buyer) a year faster and generate above-average growth come exit time .
However, “86% of decision makers in venture capital are men,” and tend to invest in the comfort zone of male founders, says Jenny Abramson, managing partner of Rethink Impact, the largest venture capital fund in the US. Female CEO, tell us.
Back in 2020, after the killing of George Floyd sparked racial justice protests and forced business leaders to honestly reckon with the slow progress of people of color up the corporate ladder, the company’s commitment to diversity was accelerated—with public support. that is wide. On paper at least, the company has also made a concerted effort to advance women, who tend to get promoted based on past results, not future promises.
Changing the face of top leadership requires more than the tweaks to company policies, employee resource groups, and mentoring programs that are now common in nearly every major company. Sustainable change requires personal intention and intervention by CEOs, boards, and other senior leaders—especially men, who still make up 90% of Fortune 500 CEOs—to reach outside the usual circles to open doors, clear paths for more leadership. high, and honestly share the experience. which is equipped to reach the top.
“If we want more women and people of color at the top, we need to show them that it’s possible — and how to get there.” former IBM Chairman and CEO Ginni Rometty, author of a new book good power, to us.
Unfortunately, the politics of the culture war are not the only factors forcing business leaders to step away from the accelerator. Hard economic times are also a threat. With the first diversity position on the chopping block, TIME recently declared that empathetic bosses are “pandemic blinkers.”
Instead of buying the valid argument that DEI is a nuisance, let’s look at the dismal DEI numbers at the top and declare a “state of emergency.” Leaving a lot of high-potential talent on the table is bad for business—and bad for the economy.
Former Fortune editors Pattie Sellers and Nina Easton are the founders of JOURNEY, a nonprofit organization focused on developing diverse women into top leadership. She previously chaired the Fortune Most Powerful Women Summits.
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