Leaders and experts across various industries testified before Congress about business’ case for diversity and inclusion on Wednesday. The hearing, “Good for the Bottom Line: A Review of the Business Case for Diversity and Inclusion,” was spearheaded by Representative Joyce Beatty (D-Ohio), who also chairs the House Financial Services Subcommittee on Diversity and Inclusion.
“Diversity and inclusion is a business imperative,” Beatty said at the hearing, referencing a 2018 McKinsey & Company diversity report. “Those who embrace it will be more likely to prosper, and those who ignore it will be more likely to fail.”
While awareness of diversity and inclusion as a competitive advantage is rising, progress on such initiatives has been slow, according to the report. Although the study found a correlation between gender and ethnic diversity, women and minorities remain underrepresented in the corporate pipeline.
McKinsey’s report expanded on a 2015 analysis, which found that companies in the top quartile for executive team gender diversity were 15% more likely to experience above-average profitability than companies in the fourth quartile. This rose to a statistically significant 21% in the 2018 study.