Study Challenges Claim That Business Benefits From “Diversity”

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Regarding influential McKinsey findings: ''Our inability to [replicate] their results suggests that ... they should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.

Regarding influential McKinsey findings: ”Our inability to their results suggests that … they should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”A new study challenges the conventional wisdom that diversity improves a business’s financial performance.

“Since we know have substantial business in the U.S. and we don’t know the scope or location of their international clients, we had to start with what we could reasonably collect,” Green toldGreen and Hand replicated McKinsey & Company’s methodology, which included sorting executive team members into racial categories after reviewing the executive’s picture and name.

McKinsey & Company further acknowledged that its work established “a correlation, not a causal link.” “We did try to exactly replicate their results as much as we could with what we know with a reasonable sample,” Green toldGreen and Hand then relaxed their methodology in an attempt to find some financial benefit to diversity in the executive team.

 

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