While the collapse of Silicon Valley Bank (SVB) was a case of a company setting a rickety structure to enable breakneck expansion, this corporate disaster is serving as fodder for the ongoing narrative that diversity is an agenda propagated by mushy-brained liberals bent on weakening American business.
In the wake of the collapse, Florida Governor Ron DeSantis, a likely presidential candidate, told Fox News viewers that the bank’s concern “with diversity, equity, and inclusion (DEI) and politics and all kinds of stuff… really diverted from them focusing on their core mission.” The echo chamber of Fox News hosts and guests followed this lead, with Tucker Carlson pontificating that DEI is why big banks are “increasingly incompetent,” and Missouri Sen. Josh Hawley tweeting “SVB=too woke to fail.”
The assault on diversity policies goes beyond the banking failure blame game–it infuses the right’s overall critique of corporate America’s focus on DEI. In early March (on International Women’s Day), Georgia Republican Congressman Mike Collins blamed a series of rail derailments on Norfolk Southern’s DEI policies, which he said were “directing resources away from important things like greasing wheel bearings.”
Here’s the irony: For all of corporate America’s high-minded mission statements around DEI (including the one on SVB’s website), there hasn’t been enough real progress for women and people of color, especially at the top.
While corporate marketers bombard us with messages “celebrating” women’s accomplishments during Women’s History Month, there is little to celebrate. The numbers are still distressing: Only 10% of Fortune 500 companies have female CEOs– and less than 1% have a woman of color at the helm. The C-suite, the launchpad for the top role, is only 26% female—and 5% women of color.
“I’ve often been the only African-American woman in the boardroom or the C-suite,” says Rosalind Brewer, the CEO of Walgreens Boots Alliance. “It’s changing but not quickly enough.”
In fact, Fortune 500 boards “have taken a step back when it comes to diversity,” according to Heidrick & Struggles. The company’s 2023 Board Monitor U.S. report notes that in 2022, 40% of Fortune 500 new director seats went to women, down from 45% in 2021, and 34% went to racial or ethnic minorities, down from 41% in 2021.
Venture capital funding, critical to building new businesses, looks even bleaker: Less than 2% of venture funding goes to women–a drop from a few years ago. Black and Latina women receive 0.43%. If we follow mathematical rounding rules, that number is approximately zero.
These numbers are bad news for the economy. Research shows that adding diverse faces to decision-making is good for business. The most diverse companies typically outperform less diverse peers on profitability. It makes sense: The added perspective that comes from diverse teams’ different experiences and backgrounds deepens conversations and broadens the decision-making lens.
In venture capital, women founders and CEOs often have better track records than men, with Pitchbook data showing that female-led companies exit (go public or find a buyer) one year faster and generate above-average growth come exit time.
Yet, “86% of the decision-makers in venture capital are men,” and they tend to invest inside a comfort zone of familiar patterns and past successes, often meaning male founders,” Jenny Abramson, the founder and managing partner of Rethink Impact, the largest U.S.-based venture capital fund investing in female CEOs, told us.
Back in 2020, after George Floyd’s murder prompted racial justice protests and forced business leaders to engage in candid reckoning about the slow progress of people of color up the corporate ladder, company commitments to diversity accelerated–with broad public support. On paper at least, companies have also made concerted efforts to advance women, who tend to get promoted on past results, not on future promise.
Substantially changing the face of top leadership requires more than the corporate policy tweaks, employee resource groups, and mentorship programs now prevalent at almost every major company. Sustainable change requires intention and personal intervention by CEOs, boards, and other senior leaders–particularly men, who still comprise 90% of Fortune 500 CEOs–to reach outside their usual circles to open doors, clear pathways to higher leadership, and candidly share experiences that equipped them to reach the top.
“If we want more women and people of color at the top, we have to show them it’s possible–and how to get there.” former IBM Chairman and CEO Ginni Rometty, author of the new book Good Power, told us.
Sadly, culture war politics aren’t the only factor pressuring business leaders to take their foot off the accelerator. Hard economic times are also a threat. With diversity positions first on the chopping block, TIME recently declared the empathetic boss “a pandemic blink.”
Rather than buying into the right’s argument that DEI is a distraction, let’s look at those dismal DEI numbers in top leadership and declare a “state of urgency.” Leaving so much high-potential talent on the table is bad for business–and bad for the economy.
Former Fortune editors Pattie Sellers and Nina Easton are co-founders of JOURNEY, a nonprofit focused on advancing diverse women to top leadership. They previously co-chaired the Fortune Most Powerful Women Summits.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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