C-Suite Demographics Are Less Racially Biased than They Seem

Consistent with popular perception, Bermiss, Green, and Hand’s comparison of their selection of S&P 500 executives with the broader population demonstrated large and seemingly troubling disparities. Blacks were underrepresented by 9.1 percent and Hispanics by an even greater 15.5 percent. Whites were overrepresented by 24.4 percent and Asians by 1.3 percent.

In contrast, the researchers find that racial/ethnic misrepresentations were much smaller when the executives were benchmarked against their college peers. Their analysis demonstrates that Asian and Black executives were statistically in line with their college-peer benchmark levels, with misrepresentations of -0.4 percent and 0.1 percent, respectively. White executives were reliably slightly above their college-peer benchmarks by 1.9 percent, and Hispanics were reliably slightly below by -1.2 percent. In short, the likely amount of discrimination and bias that may have been exerted by businesses against their non-White executives, says Hand, “shrank down to almost zero.”

In addition to analyzing what they term direct bias—actions firms take against individuals after they are hired out of college—Bermiss, Green, and Hand examined the possibility that firms were indirectly biased against non-Whites by focusing their hiring on colleges that were disproportionately White relative to the US population. To evaluate this possibility, the researchers created and applied two benchmarks that could be thought of as racially unbiased: The New York Times 2017 list of the top 100 US colleges and universities, and all US colleges and universities. They find that while the levels of executive racial/ethnic misrepresentation calculated using these benchmarks were not the same as those from the college-peer benchmark, in both cases the disparities were small enough to likely rule out the presence of a material amount of indirect bias.

One interpretation of the findings, Hand says, is that the US executive labor market has been working in a manner that is not only economically efficient but also predominantly racially unbiased. This is because the incentives in large US firms to retain the best talent seem to have essentially overridden any propensity, whether explicit or implicit, to engage in racial/ethnic bias and discrimination against non-Whites in the areas of hiring and promotions.

Bermiss, Green, and Hand suggest that if public opinion continues to press corporations toward having their executives mirror the racial/ethnic composition of the US population, recruitment and promotion policies are most likely to succeed if they focus on the beginning of the executive pipeline rather than on individuals who are already executives. However, not only will such a path be more challenging following the Supreme Court’s 2023 decision banning race-based affirmative action in college admissions, but also, as Bermiss, Green, and Hand’s research highlights, the racial composition of today’s newly admitted US college students would take 20–40 years to be fully reflected in US companies’ executives.

Hand notes that the openness of the US to attracting already-established executives from abroad, plus the appeal to young people of coming to the country for college and then remaining here, makes it likely that the future racial/ethnic makeup of executives at US firms will look less like the US population and more like the world population, particularly the subset of the world population that has a college degree.