Why diversity matters
Embracing diversity has been shown to benefit businesses significantly.
Any well-run business should seek to widen its talent pool as much as possible. So it should come as no surprise that encouraging diversity can actually benefit your bottom line.
Indeed, analysis from management consultancy McKinsey has, in its words, “reaffirmed the business case for both gender diversity and ethnic and cultural diversity in corporate leadership”.
In a 2019 study, McKinsey found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than businesses in the fourth quartile.
In the case of ethnic and cultural diversity, its business case findings were equally compelling. In 2019, top-quartile companies outperformed those in the fourth quartile by 36% in profitability.
As the study had found previously, the likelihood of outperformance continued to be higher for diversity in ethnicity than for gender.
“Businesses of all shapes and sizes need to work harder to access under-represented talent. The investment community must do the same, and not expect founders of colour to know how to approach them, or even that they exist at all.”
|Piers Linney Entrepreneur and non-executive director of the British Business Bank|
“If Black females actually started from the same position as their White peers and were less profitable, that would be one thing. Yet they don’t, and aren’t afforded the same opportunities. As we can see, their peers are 194 to 1 having seed capital invested in them.”
|Erika Brodnock Co-founder and head of research at Extend Ventures|
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