In the wake of racial protests following the murder of George Floyd, companies pledged to increase diversity within their executive ranks and accelerate change internally. But nearly two years later, there’s still a glaring racial divide in the top echelons of the business world, though headway has been made.
This year, six Black chief executives sit atop Fortune 500 companies, making up just over 1% of businesses on the 2022 ranking. That’s a noteworthy increase from last year, when only five Black CEOs ran Fortune 500 companies.
This year’s share of Black chief executives marks the return of a record high six Black Fortune 500 CEOs, only previously seen in 2012. The ranking also marks the first time a Black founder has made the list in Fortune 500 history, and the second year the list has featured two Black women—Walgreens’ CEO Roz Brewer and TIAA chief executive Thasunda Brown Duckett.
Three new Black entrants are featured on the 2022 Fortune 500. Robert Reffkin founded the real estate platform Compass in 2012. It went public on the New York Stock Exchange in April 2021, raking in $6.4 billion in revenue that year. The company ranks at No. 495.
Qurate Retail CEO David Rawlinson is another newcomer to the Black Fortune 500 executive cabal, joining the company in July 2021. Qurate, the parent company of popular shopping brands including QVC, HSN, and Zulily, brought in $14 billion in revenue in 2021 and ranks at No. 265 this year.
Frank Clyburn, who in February was appointed CEO of International Flavors & Fragrances, is the third new entrant on the list. IFF narrowly missed making the Fortune 500 ranking last year, placing 522nd. But after merging with DuPont’s Nutrition & Biosciences in February 2021, and bringing in $11.6 billion in revenue, it now ranks at No. 322.
René Jones, the CEO of M&T Bank, dropped from the 2022 list because the firm did not exceed the minimum $6.39 billion annual revenue required to make this year’s ranking. However, Jones still leads the Buffalo N.Y.-based bank.
To be sure, any increase in Black CEO representation is cause for celebration given the Fortune 500’s predominantly white and male history. But there’s still a sizable parity chasm. Consider this: If the CEO makeup of the Fortune 500 was reflective of U.S. demographics, there would be more than 65 Black CEOs (13.5%) leading America’s largest public companies, compared to the current state of around 1.2%.
“I’m always appreciative of increases because directionally it’s the right answer, but I’m also mindful… that the overall numbers are still significantly low,” says Michael Hyter, president and CEO of the Executive Leadership Council (ELC), an organization that works to build a C-suite pipeline for Black executives.
Just 24 Black CEOs have made the Fortune 500 list in its roughly 68-year history. That number is “disheartening,” Hyter says, noting that the root cause isn’t a lack of talent, but a lack of development opportunity.
Most Fortune 500 CEOs, regardless of gender and ethnicity, “were not automatically placed into those roles. There were a series of experiences, developmental moments, and opportunities for demonstration of capability that each of them had,” Hyter says. “That just doesn’t happen to the same degree with Black executives in the pipeline.”
Creating a robust pipeline of future Black CEOs will require that companies prioritize would-be candidates based on their potential to deliver at high levels early in their careers, instead of assessing their late-career performance alone. This means offering Black employees high-value and high-visibility assignments, providing them with sponsorship opportunities, and being deliberate and transparent about goals and performance metrics.
Hyter says that companies should continuously ask themselves, “What’s the percentage of people in the pipeline who have the potential to manage a billion-dollar business, and who ultimately could be in the queue for CEO consideration? If the answer is zero, then [they] need to work on that.” Individuals in roles overseeing a company’s finances, like CFOs and chief operating officers, are generally more likely to be given the nod for CEO placement. As of 2019, Black executives held only 10% of senior P&L roles in the Fortune 500.
“Profit and loss responsibility creates a better and clearer recognition of a person’s capabilities of managing a business,” Hyter says.
Roz Brewer, CEO of Walgreens Boots Alliance, the highest-ranking Black-led company, is a prime example of the growth opportunities that are a byproduct of P&L roles. She previously served as CEO of Sam’s Club and COO at Starbucks before joining Walgreens in 2021. The pharmacy store chain is No. 18 on the list and brought in $148.5 billion in revenue in 2021.
“She’s the epitome of experiences, additional responsibilities, and demonstrated value,” Hyter says. She’s also the third Black woman ever to run a Fortune 500 company, followed by TIAA’s Brown Duckett who kicked off her CEO tenure in March 2021, making her the fourth Black woman to lead a Fortune 500 company. The insurance firm brought in $40.5 billion in revenue in 2021, placing it at No. 90 on the Fortune 500.
Lowe’s CEO Marvin Ellison serves as yet another testament to the importance of having full remit over a significant P&L operation. He joined Home Depot as executive vice president of stores in 2002, a role with P&L responsibilities. Passed up for the company’s CEO role in 2014, he left for J.C. Penney, making him the only Black executive to have held two CEO titles at Fortune 500 companies. The hardware chain brought in $96 billion in revenue in 2021 and comes in at No. 35.
Correction, May 23, 2022: This article has been updated to include Qurate Retail CEO David Rawlinson.
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