Company Stock Prices Rise When Blacks Are In the CEO Seat, Study Says

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Listen up, Corporate America. In case you need another reason to consider a Black person for the CEO spot of your company, you should know that it could impact your bottom line. Results of a recent study released in the Strategic Management Journal found that companies’ stock prices increase when they hire Black CEOs.

According to the researchers, the jump in stock price has less to do with their color and more to do with credentials. They say any racial biases an investor may have usually go out the window when looking at Blacks at the helm who tend to have more attractive resumes than their white counterparts.

And the numbers don’t lie. When looking at the study participants, 93 percent of the Black CEOs had advanced degrees compared to only 53 percent of white ones. The Black corporate chiefs were also more likely to have degrees from elite universities.

But as the researchers point out, these stats point to a much broader issue with hiring practices in Corporate America, where Black employees must continually outperform their white counterparts to put themselves in the running for executive positions.

“To be considered for appointment as CEO, a Black executive would have to repeatedly prove themselves over the course of their careers in ways White CEOs do not,” they say. “As a result, newly appointed Black CEOs are likely to exhibit exceptional attributes relative to their White counterparts.”

It’s also important to note that while there is no shortage of talent, there is still a great deal of racial disparity in executive roles. This year’s Fortune 500 only included six Black CEOs.

According to Ayana Parsons, a senior partner at Korn Ferry, a management consultant company specializing in diversity and inclusion, companies need to do a better job of cultivating Black talent from within so they are ready for their shot at the corner office.

“The only way for us to get more Black CEOs in corporate America is to develop them,” she said.



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