Diversity in CEO Succession Pools: The Challenge Remains Great

7/27/17

The HR@Moore Survey of Chief Human Resource Officers (CHROs) has become an annual research project leveraging the experience, insights, and insider reports of the CHROs at a number of large, multinational companies based in the U.S. This year’s survey went out to 505 executives with 134 responding for a response rate of 27 percent. This week I want to report on what the results of this survey show regarding the sex- and race-diversity of CEO succession pools. 

This year, just as in 2016, we asked CHROs to indicate the percentage of both women and racially diverse candidates in the CEO succession pool for both the 0-3 year and 3-5 year timeframes. In the short term (0-3 year) we saw a slight decline such that only 10 percent of the pool is female and 7 percent racially diverse compared to 12 percent and 8 percent in 2016, respectively. The longer term (3-5 years) had a slight uptick to 15 percent female and 12 percent racially diverse compared to 14 percent and 10 percent respectively, last year. These numbers are not significantly different across the two years, but they do indicate that organizations face an uphill battle in attempting to create greater sex and race parity in the CEO succession pool. 

Not surprisingly, given the similarity of the numbers across years, CHROs report that these numbers continue to fail to meet their company’s diversity goals. In fact, 77 percent of CHROs in our data reported falling short or extremely short of their diversity goals this year as compared to 70 percent in 2016. Further, while many feel they fall short of their goals, none of the respondents indicated they far exceed their diversity goals. However, 8 percent state they have exceeded their expectations, which is up from 2 percent in 2016. This small positive trend continues when looking to the future.

Finally, when asked how these numbers compare to 5 years ago, 52 percent report that they have increased or greatly increased diversity whereas only 44 percent reported this in 2016. There is a .53 correlation between attainment of current diversity goals and improvement of the diversity CEO successor candidate pool compared to five years ago, indicating many who have improved in the short term are also those who are making gains in their long term plans as well.

These results, while disappointing, are not surprising given what we found in the 2016 survey. In the next blog I will share what we found organizations are doing to increase the diversity of their CEO succession pools.