The numbers have improved since 2020, when widespread social justice movements led to companies pledging to improve their diversity efforts. Back then, there were only four Black CEOs; two years later, six; in 2023, nine, and now back down to eight. 

Despite the progress, 1.6% is still a severe underrepresentation given that Black workers make up 13% of the labor force, according to the U.S. Bureau of Labor Statistics. 

Some diversity experts attribute the lagging number to a lack of corporate commitment to diversity, equity, and inclusion (DEI). Conservative activists are waging a war against DEI in the courts, classrooms, and now, the battle is spreading through the corporate world. 

Conservative activist attacks on Corporate America 

DEI initiatives are designed to provide rungs for Black workers to climb the corporate ladder, which the majority of Americans support, according to a new poll. The conservative backlash targets each of those rungs. An appeals court just outlawed a venture capital fund that targets their grants to Black female entrepreneurs, blocking some of the first access points for minority business owners. 

Earlier this year, pharmaceutical giant Pfizer dropped race-based eligibility requirements for a fellowship program designed for Black, Latino and Native American college students. In May, Comcast opened up its grant program to all business owners after being sued for initially intending the grant for women and people of color. 

Companies like Bank of America, Goldman Sachs Group, Tesla, and Zoom Video Communication, Inc. have all scaled back their DEI teams, essential for recruiting, hiring, and onboarding diverse candidates. Diversity executives at Netflix, Time Warner, and Disney have left their jobs due to overwhelm and in-office obstructions to their work. 

The decimation of each of these programs results in a chilling effect on Black applicants, who already are fighting for a way into a company, let alone to the top, said Alexis Washington, assistant professor in the Management Department at Oklahoma State University. 

“Once you get to that director level, there’s just so few professionals of color, let alone specifically Black professionals, that the opportunity to find mentors is even thinner, and that becomes even more critical as you move further up the ranks,” she told Fortune. “So to me, if we’re starting to ask the questions when we get to the CEO level, we’re going to be late.”

“Diversity Washing”

Stanford professor David Larcker, who directs the business school’s Corporate Governance Initiative, told Fortune that he is not surprised by the corporate world’s retreat from DEI programs. He has been researching companies that “diversity wash,” meaning they talk a lot about DEI, but in reality, are not very diverse internally. 

Further analysis of the companies identified as  diversity washers found they were more likely to have a U.S. Equal Employment Opportunity Commission violation, according to a paper that Larcker and his colleagues released in April. These companies were also more likely to have “questionable ESG policy,” he said, referring to environmental, social, and governance factors. 

Yet, diversity washing is rewarded: these companies looked more attractive to investors who targeted relatively higher ESG rankings  in alignment with their own social commitments.  

To Larcker, this result was not “unexpected,” but still “shocking.” 

 “We’re looking at this issue where a company says: ‘Hey, I have a chief diversity officer,’ or  ‘Hey, we’ve appointed a diverse senior executive, or added a diverse board member.’ What impact does that have on the diversity inside the organization?” Larcker said. “The answer is, on average, not that much.” 

The companies claiming to have significant numbers of diverse employees often did, Larcker said, but minorities were in lower-level positions, where they couldn’t develop or utilize organization or leadership skills. 

As of now, there is no standardized, hard data collected by the SEC on the demographics of different departments and positions within organizations, Larcker said. He believes that having more “hard facts” on companies’ diversity numbers would help boost diversity throughout an organization. 

“There are these shareholder proposals now saying we want a diversity audit where  an accounting firm comes in and audits and tests the numbers,” Larcker said. “There ought to be some regulations put in place saying ‘are you doing this, or not?”