Racially Diverse Companies: Higher Financial Returns More Likely
The research is clear, companies with racially diverse workforces tend to financially outperform their industry peers.
For every 10 percent increase in racial and ethnic diversity on the senior executive team, earnings before interest and taxes (EBIT) rise 0.8 percent according to McKinsey & Company’s Diversity Matters report.
Using data from 366 public companies across varying industries in Canada, Latin America, the U.K., and the U.S., the study found a connection between a company’s racial and ethnic diversity and its above average financial performance.
According to McKinsey & Company’s article, Why Diversity Matters, when looking at companies in the top quartile for racial diversity, the study found that companies with racially diverse workforces had a 35 percent increase in the likeliness of having higher financial returns than their respective national industry medians.
Conversely, companies identified in the bottom quartile for both racial and gender diversity are less likely to attain more than industry median financial returns.
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