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THE BUSINESS CASE FOR DIVERSITY

There is a strong business case for diversity.

According to McKinsey, there is a direct correlation between
diversity (defined there as a greater proportion of women and
ethnically/culturally diverse individuals) in the leadership of large
companies and two measures of financial outperformance:
profitability (measured as average EBIT margin) and value creation
(measured as economic profit margin).

McKinsey found companies in the top quartile for gender diversity
on executive teams were 21 percent more likely to outperform
on profitability and 27 percent more likely to have superior
value creation. Meanwhile, companies in the top quartile for
ethnic/cultural diversity on executive teams were 33 percent
more likely to have industry-leading profitability. This suggests
that inclusion of highly diverse individuals — and the myriad ways
in which diversity exists beyond gender (e.g., ethnicity, LGBTQ,
age/generation, international experience) — can be a key

differentiator among companies. Furthermore, McKinsey found
that more diverse companies are better able to attract talent.

Source: Delivering Through Diversity, January 2018, McKinsey & Co.

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