When Avon Products Inc. announced that CEO Andrea Jung would step down next year, investors and corporate leadership gurus cheered. I get Wall Street's enthusiasm. Though Jung, a 53-year old Asian-American woman, dazzled early in her 10-year reign, Avon has struggled mightily under her leadership in recent years. Still, I cringe at Jung's looming departure. The unspoken fact is that her exit will leave only two women of color — Xerox's Ursula Burns and Pepsi's Indra Nooyi — sitting in the chief's chair of Fortune 500 companies.
Don't get me wrong. I am no advocate of promoting or retaining women in the C-suite simply because of their gender or ethnicity. Merit should unquestionably be the priority for serious hiring (or firing) at any level. But Jung's imminent exit underscores a disturbing fact: Women of color are woefully underrepresented in leadership.
Across the economic spectrum — whether business, law, sports, politics, academia or religion — women represent less than 20% of the leaders in the U.S., even though their workforce participation is equal to or greater than that of men, according to a White House Project study. The numbers are even more dire for women of color, especially black women. Professional black women make up only 1% of U.S. corporate officers, despite the fact that 75% of corporate executives believe that having minorities in senior level positions enables innovation and better serves a diverse customer base, says Sandra Finley CEO of the League of Black Women. "You can't name five that sit on a corporate board," Finley laments. "Black women are toiling in middle management and that is usually the height of their career."
The shame of this stunted existence for women of color is that U.S. companies are missing out on a proven competitive advantage. Consider that a few years ago, a study by research firm Catalyst demonstrated that companies with three or more women board directors reported considerably stronger-than-average financials. The perspectives, the intelligence, and the creativity that women bring to the boardroom are why policy makers in several European countries have begun to legislate that their corporate boards recruit women directors.
I should hope there's no need to for such a mandate in the U.S. I would prefer that shareholders with financial returns in mind send this urgent message: The boards of directors and executive management teams of America ought to be equitably represented by women, and those women must be ethnically diverse.
In this day and age it only makes sense. Consider that the combined buying power of racial minorities (African Americans, Asians and Native Americans) will rise from $1.6 trillion in 2010 to $2.1 trillion in 2015, accounting for 15% of the nation's total. Similarly, the buying power of Hispanics will rise from $1 trillion in 2010 to $1.5 trillion in 2015, nearly 11% of the nation's total buying power, according to the Selig Center for Economic Growth at the University of Georgia. The Hispanic market alone is larger than the entire economies of all but 14 countries in the world.
With markets that lucrative at stake, corporate decision makers would benefit from innate understanding of how to sell to them. The fact is, women generally drive the purchasing decisions within these communities, just as they do in the rest of the population. And the sensibilities of women of color only enhance a management team's or a board's ability to strategize ways for reaching these markets. Why then are these women so absent from our leadership ranks? "Organizations do a really poor job of assessing talent, especially among those that don't fit the homogeneous norm," explains Ginny Clarke, CEO of Talent Optimization Partners and a veteran executive recruiter. But she warns: "If you don't have a system that allows you to identify who's good, better and best — without regard to gender and ethnicity — then your success will be limited."
After 10 years at the helm, perhaps Andrea Jung's time at Avon has run its course. But Jung should not be an anomaly. There are plenty women of color like her, with the talent to lead.
This blog first appeared on Harvard Business Review on 12/20/2011.