Throughout the past five years, several organizations have published multiple studies attempting to quantify the impact of various levels of corporate diversity on increased shareholder value, customer satisfaction and employee engagement, otherwise known as the “Big Three.” “Why Diversity Matters,”[1] published by McKinsey in 2015, is one of the original and oft-cited studies using a global dataset. It concluded:

“We know intuitively that diversity matters. It’s also increasingly clear that it makes sense in purely business terms. … And diversity is probably a competitive differentiator that shifts market share toward more diverse companies over time.”

The study found that the link between diversity and the “Big Three” is one of correlation and not causation, meaning that more diverse companies are better able to attract top talent, which then drives more of the “Big Three.” In its findings, the study determined that “companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.” In addition, gender diversity resulted in a 15% increase in the likelihood of such returns.

This study was updated in 2018[2] using a trebled dataset, with these key conclusions:

• Gender diversity is correlated with both profitability and value creation.

• For gender, the strongest correlation is found in the executive team.

• Executive teams of outperforming companies have more women in line roles versus staff roles.

• Top team ethnic and cultural diversity is correlated with profitability and the penalty for not being diverse on both counts persists.

This year, the Harvard Business Review[3] published a study whose authors also support the theory of correlation rather than causation:

“Leaders may mean well when they tout the economic payoffs of hiring more women and people of color, but there is no research support for the notion that diversifying the workforce automatically improves a company’s performance. This article critiques the popular rhetoric about diversity and revisits an argument the authors made 25 years ago: To fully benefit from increased racial and gender diversity, organizations must adopt a learning orientation and be willing to change the corporate culture and power structure.”

The study proposed four key actions leaders must take:

• “Building trust and creating a workplace where people feel free to express themselves”

• “Actively combating bias and systems of oppression”

• “Embracing a variety of styles and voices inside the organization”

• “Using employees’ identity-related knowledge and experiences to learn how best to accomplish the firm’s core work”

No matter how you feel about the impact of embracing corporate diversity, these four thoughts are an excellent mantra for us all to follow.

1. Hunt, Vivian, et al. “Why Diversity Matters.” McKinsey & Company, Jan 1, 2015.

2. Hunt, Vivian, et al. “Delivering Through Diversity.” McKinsey & Company, Jan 18, 2018.

3. Ely, Robin J. and David A. Thomas. “Getting Serious About Diversity: Enough Already with the Business Case.” Harvard Business Review, November-December 2020.

Scott A. Thacker is the founding chair of ELFA Equality, the diversity and inclusion initiative of the Equipment Leasing and Finance Association. He is the CEO of Ivory Consulting Corporation.