The Sad Lack of Diversity in the CEO Succession Pipeline

9/23/16

Few studies have accurately examined the diversity of the the CEO candidate pool. A number of leading thinkers have bemoaned the low levels of sex and race diversity among CEOs and other C-suite positions. The 2013 HR@Moore survey revealed that one of the difficult conversations CHROs have with CEOs and boards is with regard to the diversity of the candidate pool. This year we asked CHROs about the diversity of the CEO candidate pool in both the short term (0-3 years) and longer term (3-5 years). Suffice to say, the candidate pool is not diverse and it is unlikely to become substantially more diverse in the next five years.

CHROs indicated that just over 11% and just under 9% of their short-term (0-3 years) candidate pool was diverse in terms of sex and race, respectively. In addition, just over 14% and under 10% of longer-term (3-5 years) candidate pools are diverse in terms of sex and race, respectively.

The CHROs in our study certainly understand the importance of building a diverse pool of candidates. However, given the current makeup of the executive labor pool, they are finding it difficult to meet their goals. We asked them to indicate the extent to which the diversity level of their candidate pool compared to their diversity goals. Disappointingly, the vast majority of CHROs (70%) indicated that their current pool falls short of their diversity goals. Very few (27%) noted that their pool meets their goals, less than a handful (2%) that they exceed, and none indicated their pool far exceeded its goals.

On a more positive note, we also asked them the extent to which the current diversity level compares to the pool 5 years ago. To this 39% of CHROs indicated that were making some progress relative to five years before. This should be tempered by the fact that greater than 50% indicated that the diversity of their current pool was the same or had decreased over that timeframe.

In conversations with CHROs it is clear that the lack of diversity is not for lack of effort. They truly desire to increase both the sex and race diversity of candidates. However, the current labor market at the executive level leaves companies fighting over a limited supply of diverse talent…to attract one to your organization just means taking one from another. Thus, the challenge, to which I think all CHROs are ready to rise, is to focus on colleges, high schools, and even middle schools to build a future pipeline of talent that will create a tremendous supply of diverse talent over time.