The Fortune 500 Is Looking More Diverse, But The C-Suite Lags Behind
People from historically underrepresented groups are securing more roles at Fortune 500 companies. Nevertheless, a new report has found that they are overrepresented as diversity and inclusion officers and unrepresented in the C-Suite.
Fortune 500 C-Suite Snapshot
The executive search firm Spencer Stuart reported on its Fortune 500 C-Suite Snapshot, asking how leadership teams of Fortune 500 companies are evolving in response to changing demands.
The report mapped leader profiles for 11 roles commonly included in the C-Suite to develop a snapshot of executives in these positions.
C-suite executives commonly include the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), and Chief Information Officer (CIO).
C-level members work together to ensure a company stays true to its established plans and policies.
Who Holds What Roles?
Overall, the report found that together, women and people from historically underrepresented racial and ethnic groups constitute 49% of C-Suite leaders.
However, their representation varies significantly across the roles.
CEOs, COOs, and CFOs are less likely to be women or people from minority backgrounds than in other C-suite roles.
Only 12% of CEOs were from minority backgrounds, 9% were COOs, and 11% were CFOs.
Overall, only 16% of people from historically underrepresented racial and ethnic backgrounds held C-Suite level jobs.
Overall, from 2022, underrepresented groups saw a one percentage point decrease in representation across the C-Suite.
An Increase In DEI roles
The report saw year-over-year increases in companies with Chief Inclusion and Diversity Officers, suggesting that leaders view Diversity, Equity, and Inclusion (DEI) as essential levers for business performance.
Over half of the Fortune 500 companies have a Chief Inclusion and Diversity Officer.
Most leaders in New Fortune 500 roles, such as Chief Inclusion and Diversity Officers and Chief Sustainability Officers, are from minority backgrounds.
People from minority backgrounds comprise 9 in 10 (89%) Chief Inclusion and Diversity Officer roles, a 2% increase from 2022.
The top HR, Communications, and Marketing leaders also represent more racial, ethnic, and gender diversity.
Internal Hiring Is Hampering Diversity
However, the report found that, on average, 59% of C-Suite leaders are internal appointments to their roles, hindering the pipeline of diverse talent that may come externally.
COOs (80%) are the most likely to be promoted from within, followed by CEOs at 77%.
Because of this, hiring externally is critical to bring greater diversity to corner officers at the largest US companies, said Nordia Edwards, a Spencer Stuart consultant specializing in CEO succession planning.
“Hopefully all companies seeing this will realize the importance of the internal pipelining towards those roles,” she told Fortune.
