Diversity in the C-Suite

Diversity in the C-Suite

David F. Larcker, Brian Tayan
Stanford Closer Look Series. Corporate Governance Research Initiative, April

There has been a broad push in recent years to increase diversity at the board and CEO levels of public corporations. Despite this effort, diversity on boards and in senior leadership positions has not reached the levels to which advocates aspire. We provide new insight into this topic by examining the size, structure, and demographic makeup of the C-suite (the CEO and the direct reports to the CEO) in each of the Fortune 100 companies. Demographic statistics by each functional role are provided. Organizational charts of the C-suites of each company as of February 2020 are provided by reference.

We find that women (and, to a lesser extent, racially diverse executives) who directly report to the CEO are underrepresented in positions that directly feed into future CEO and board roles (such as CFO and P&L leaders) and have greater representation in positions that are less likely to lead to these appointments (such as general counsel or human resources). That is, diversity statistics in the C-suite — even though low — still overstate the likelihood of increased diversity among corporate leadership in coming years.

We ask:

  • At what step along the way does the process of promoting diverse executives break down?
  • Should companies disclose diversity in greater detail by level or function?
  • What accounts for the fact that women have much higher representation in lower potential C-suite roles?
  • What accounts for the very low levels of racial diversity across C-suite roles?
  • When will company initiatives actually lead to tangible improvements in diversity?