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Jan 28, 2022

Where are the Black CEOS at Big Companies?

By Team Stash

Fortune 500 companies fall short when it comes to hiring Black professionals and fostering their careers.

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Serious racial disparities can be found everywhere in the U.S., and corporate America is no exception.

Currently,  there are just four Black chief executive officers leading the largest public companies in the U.S. They include Thasunda Brown Duckett of the Teachers Insurance and Annuity Association of America (TIAA), René Jones of M&T Bank, Marvin Ellison of home improvement chain Lowe’s, and Rosalind Brewer of pharmacy Walgreens. Frank Clyburn will become the fifth when he takes over as CEO of International Flavors and Fragrances on February 14, 2022.  

And despite attempts to increase diversity, Black executive leadership at Fortune 500 companies has actually decreased since 2012. The Fortune 500 includes the 500 biggest companies in the U.S., bringing in $13.8 trillion in revenue, collectively. 

While many of these companies have committed to increased diversity and inclusion in hiring, Black workers may experience more prejudice in the office and more roadblocks to advancement in their careers, according to experts. For these reasons, there still exists a significant leadership gap along racial lines at the top.

Understanding the leadership gap

Franklin Raines was the first Black CEO to head up a Fortune 500 company, taking over the role at the mortgage loan company Fannie Mae in 1999. Since his tenure, Fortune 500 companies have seen only 22  Black CEOs or board chairs.

This leadership gap widens further for Black women. When Duckett  took on her position at TIAA, she became the third Black woman to hold a CEO position at a Fortune 500 company. Ursula Burns was the first, acting as a CEO of print business Xerox from 2009 to 2017. In 2019, Mary Winston became the interim CEO at Bed, Bath, & Beyond, before she was replaced by a white man. 

The leadership gap extends beyond CEO to other executive roles. Black Americans make up 8% of professionals in the U.S., according to a 2019 study from Coqual, formerly known as the Center for Talent Innovation (CTI). Additionally, 3.2% of executives, senior-level officials, and managers are reportedly Black. 

Black professionals may also experience more roadblocks to advancement. The Coqual study found 65% of Black employees said they were “very ambitious,” compared to 53% of white employees. Meanwhile, 19% of Black employees said that someone of their race or ethnicity would never achieve a top position at their company, compared to 3% of white employees. Black respondents reported less access to senior leaders at their jobs than white respondents (31% vs 44%).  

Black employees are also more likely than other racial groups to experience prejudice in the workplace, according to Coqual. Fifty-eight percent of Black workers have experienced racial prejudice at their jobs, compared to 41% of Latinx workers, 38% of Asian workers, and 15% of white workers. 

When Black employees do hold executive positions, they reportedly aren’t often ones that lead to higher roles, such as CEO. For example, 13% of chief human resources officers, 20% of chief sales officers, and 43% of chief administrative executives at Fortune 100 companies are Black.

How companies can address the leadership gap

The lack of advancement for Black employees is often a failure on the part of the organization itself, say some experts. “The biggest reason why there is a lack of Black executives remains due to the lack of talent development which leads to high retention rates,” says Michelle Ngome, founder of Line 25 Consulting, an inclusive marketing company, based in Houston, Texas.  

To combat racism in the workplace, changes need to come from existing leadership, says Gena Cox, the head of advisory and research at consultancy Feels Human, Inc., in Tampa, Florida. “Decision-makers and power-wielders must get to know people of color, and Black people, particularly, a little better,” she says. Cox urges companies to hire more people of color, but also to “infuse inclusive behaviors” into their workplace cultures to prevent Black employees from leaving. 

Ngome also notes an increasing interest Black entrepreneurship as an alternative for Black professionals to build their own businesses, with Black Americans at the center. “People turn to entrepreneurship for a ton of reasons, but most Black people have a bad taste in their mouth when it comes to corporate. Entrepreneurship is a new way of life with freedom and flexibility,” she offers. You can learn more about Black entrepreneurs and how you can support small Black businesses during Black History Month here.

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