Here’s why the Fortune 500 has almost no black CEOs
By Robert Stitt
In 2012, black citizens comprised 14.2 percent of the United States population. When African American CEO of McDonalds, Don Thompson, left the company in March, it dropped the present day percentage of top CEOs in the country who were black to .8 percent. JC Penney is set to add an African American to the head of its company in August. When it does, their new CEO, Marvin Ellison, will move the needle all the way to one percent.
Ronald C. Parker, CEO of the Executive Leadership Council, an organization representing top black executives in the Fortune 500, said that there was a time when the Fortune 500 companies had 12 black CEOs, but the number gone down consistently over the last several years.
Parker, who was once Pepsi’s senior vice president for human resources, labor relations and global diversity and inclusion, gave one possible reason for the low percentages, and the rapid decline. Since most of the CEOs are white men, “People have a tendency to select individuals that they are familiar with and comfortable with. They are comfortable with their network of the people that they know, therefore the people that get those opportunities tend to look like them.”
Spring-boarding off of Parker’s observations, it is not just black Americans who are having a hard time breaking into the C-suite. In February, 2014, Fortune magazine noted that all minorities composed just over 4 percent of the Fortune 500 CEOs, and there were only 24 women in the top executive post of those companies, or just 4.8 percent.
Speaking from his Pepsi experience, Parker noted that the lack of minority hiring was not entirely intentional, but was partially a result of globalization. The Fortune 500 is comprised of mostly multi-national corporations, and the hiring focus was on leaders who had experience in the international marketplace. That does not mean that workplace and hiring bias had nothing to do with it, but it does mean that it is going to be harder than ever for minorities to break into those positions unless they first have extensive international experience. This is a double-edged sword when those same minorities face the biases that keep them from getting that experience.
Christy Glass and Alison Cook have a different thought as to the decline of the African American and minority CEO. The two professors at Utah State University attributed much of the decline to what they call the “glass cliff.” Glass says that minority CEOs are often hired at a time when a company is facing difficulty. They are brought in to make changes and try to work through the issues, and if things don’t turn around quickly, they are let go so the board can bring in a white male to “save the day” and calm down shareholders. Glass says this is actually called the “savior effect.”
According to the Huffington Post, Glass also noted that “White men CEOs lead failing firms all the time. Women and minorities aren’t given the benefit of the doubt. When they slip up — even if it’s not their fault — it’s really easy to blame them because we already have these biases that they may not be as competent as other leaders.”