"While top companies are increasingly ensuring that their general workforce reflects the country's demographics - in line with both ethical and legal requirements - the faces at the very top will continue to look the same for many years and, more likely, even the next decade," says Debbie Goodman-Bhyat, MD of Jack Hammer Executive Headhunters.
"Trends show a continued aversion to risk on the part of boards, even when boards themselves reflect the diversity of the country, and this approach is not expected to change any time soon." Goodman-Bhyat says making the CEO appointment is one of the most intricate decisions facing boards, especially in an age where accountability and transformation are crucial. Yet time and time again, the CEO role remains untransformed.
"There is a mould of what leadership looks like, and we keep using the same mould. Risks are rarely taken, and experiments left for where the potential damage of a false move will be limited," she says. "These actions should not necessarily be ascribed to an unwillingness to change, but rather simply an aversion to the risk associated with shifting toward a different paradigm."
Goodman-Bhyat says achieving true transformation in the most senior positions is taking longer than expected, in spite of quotas, charters and all the policies designed to address historical discrimination. The racial breakdown - of 85% white representation and 15% black - in the top jobs, is not only reflective of the situation in the Top 40 companies. In fact, in the Broad 40, the situation looks even bleaker, at 88% white representation.
"The lack of transformation therefore cannot simply be ascribed to being indicative of a scarcity of skills," says Goodman-Bhyat. She says that the challenge to the status quo is only expected to arrive in about a decade, as the current crop of emerging black and female leaders are still in their 30s and 40s.
"We will only start to see them lead companies when they are in their late 40s and early 50s. Boards demonstrate a continued aversion to risk, remaining conservative in order to manage downside risk. While diversity is top priority on annual reports, shareholders want tried and tested leaders and companies are simply not willing to compromise on experience. And there is no short-circuiting of time to gain the depth of experience today's big bosses gained over years of earning their stripes and accumulating their battle scars.
"We are seeing more diverse executive teams, for sure. Especially in HR, marketing and finance, there are many more female and black leaders emerging. However, these leaders are not yet getting the green light to enter the corner office. For now it remains clear that the business imperatives of transformation and diversity are nowhere near as much of an imperative as the financial bottom line," she concludes.
