Changing the Landscape of Corporate Leadership: “Know when to hold ‘em, Know when to fold ‘em.”

By: Marcia Leach

Blog Category: Minorities in the Corporate World

Changing the Landscape of Corporate Leadership: “Know when to hold ‘em, Know when to fold ‘em.”[1]

In May of 2011, the Alliance for Board Diversity (“ABD”) Census reported that between 2004 and 2010, Caucasian men in the Fortune 100 corporations gained 32 corporate board seats while African American men lost 42, and women, particularly minority women, had no appreciable increase in corporate board seats.[2] The census also found that Fortune 500 boards were even less diverse than the Fortune 100 boards.[3] Ilene H. Lang, Chair of ABD and President and CEO of Catlyst, called the results “staggering”, in light of today’s labor market having “. . . so many qualified women and minority candidates available for board service.”[4] Thus, the results confirm that in order to change the landscape of corporate leadership, proponents for the diversification of corporate boards need to change their strategic approach by shifting away from arguments “based on social and moral grounds” to “market-based” arguments supporting diversity on corporate boards.”[5]

Evan Roberts in his law review article, Corporate Leadership and the Unfinished Diversity Movement, found that “[D]espite their symbolic rhetoric, these rationales [social and moral grounds] do not appear to energize the business community enough to inspire broad changes in policy.”[6] In response to the judicial opinions in Bakke and Grutter where the majority of the Supreme Court justices “indicated skepticism over arguments for affirmative action based on the need to remedy past (or even present) societal discrimination,” market based arguments offer a way for advocates to utilize the broad ‘diversity’ rationale that eliminated strict consideration of race.”[7] According to Roberts, the “business case for diversity” makes sense in the present social and legal climate and is increasingly playing “a major role in the debate over why firms should seek to accelerate racial and gender integration.” [8]

One study by The Council of Institutional Investors (“CII”) offers “two sale-related” arguments for corporate boards to diversify.[9] First, diverse boards have a “deeper understanding of minority purchasing priorities and better connections to various minority communities” where there has been new growth in marketing opportunities.[10] Second, diverse boards have a better understanding of cultural differences in the global marketplace.[11] “Talented minority candidates can more easily plug themselves into markets where they have an understanding of the cultural differences of the market, relative to their white peers.”[12]

For diversity advocates, surely the time has come “to know when to hold ‘em and know when to fold ‘em” if they are going to change the corporate landscape.[13]

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.


*Marcia Leach is a staff member on the Widener Journal of Law, Economics & Race. To learn more about Marcia, click here to view her page.

[1] Kenny Rodgers,The Gambler,(Dream Catcher 1978)

[2] Women and Minorities lose Ground on Fortune 500 Corporate Boards, Diversity Employers, © 2011 by IMDiversity, Inc., accessed 3/3/2013.

[3] Id.

[4] Id.

[5] Evan Roberts, Corporate Leadership and the Unfinished Diversity Movement, 14 Duq. Bus. L.J. 277, 280-81 (Summer 2012).

[6] Id. at 280-81.

[7] Id. at 281

[8] Id.

[9] Id. at 282.

[10] Id.

[11] Id.

[12] Id.

[13] Rodgers, supra note 1.

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