Study debunks McKinsey pro-Diversity reports
https://dx.doi.org/10.2139/ssrn.3849562
In a series of influential studies, McKinsey (2015, 2018, 2020) report a statistically significant positive relation between the industry-adjusted EBIT margin of global samples of large public firms and the racial/ethnic diversity of their executives. However, when we revisit McKinsey’s tests using recent data for US S&P 500® firms, we find statistically insignificant relations between McKinsey’s inverse normalized Herfindahl-Hirschman measures of executive racial/ethnic diversity and not only industry-adjusted EBIT margin, but also industry-adjusted sales growth, gross margin, ROA, ROE, and TSR. Our results suggest that despite the imprimatur often given to McKinsey’s (2015, 2018, 2020) studies, caution is warranted in relying on their findings to support the view that US publicly traded firms can deliver improved financial performance if they increase the racial/ethnic diversity of their executives.
Reminder that most of the scientific literature finds that gender and ethnic diversity has a negative impact on a firm's performances and returns.
Affirmative action and diversity hires are not only unfair, they destroy economic value.
You should join a choir bc you're preaching to the crowd
Is your conclusion that firms that are 100% male or female, 100% Asian or black or brown or white, etc outperform firms that are more diverse? Is that really what you took away from the report you shared lol
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