Greater Diversity in Management Linked to Stronger Financial Performance Compared to Mostly White Male Management
FOR IMMEDIATE RELEASE
As You Sow analysis of over one million EEO-1 data points across nine years finds that diverse management is associated with stronger revenue growth, returns, and share performance
MEDIA CONTACT: Ryon Harms, [email protected], (310) 730-9407
EL CERRITO, CALIFORNIA – July 23, 2026 – As You Sow, the nation’s leading shareholder representative, today released an updated edition of its Capturing the Diversity Benefit report, analyzing nine years of federal workforce Equal Employment Opportunity (EEO-1) data. The report answers a question now at the center of corporate and political debate: does workforce diversity link to better financial performance? Drawing on more than one million data points from mandatory EEO-1 filings across 1,482 publicly traded U.S. companies between 2016 and 2024, the report finds that companies with more diverse management teams were consistently associated with stronger financial results.
The analysis found that greater representation of Black, Indigenous, and people of color (BIPOC) in management was significantly and positively associated with income after tax, five- and ten-year revenue growth, return on equity, return on invested capital, free cash flow per share, and five- and ten-year share price appreciation. The positive link to income after tax and ROIC was seen from 2016 through 2019, four years before the surge in corporate diversity commitments that followed the murder of George Floyd in 2020.
By direct contrast, increases in White male management representation showed the most consistently negative association with aggregate financial performance across broad financial metrics.
"This is not about White men,” said Andrew Behar, CEO of As You Sow, himself a White man. “It's about what happens when a management team thinks the same way. Homogeneous leadership tends to share the same blind spots, miss the same risks, and reach for the same familiar answers, and over time, that shows up in financial results. The data indicates that investors who wanted their portfolios to outperform between 2016-2024 could have bet on diverse management teams.”
Despite nine years of growing workforce diversity, the report found that a gap between diversity in the overall workforce and in management persists. BIPOC workforce representation rose from 30.0% to 39.9% between 2016 and 2024, yet the gap between BIPOC representation in the workforce and in management held at nearly 11 percentage points. In the Consumer Discretionary sector, BIPOC employees made up 52% of the workforce but only 35% of management. Female management representation improved across most of the economy, with one striking exception: in the Finance sector, female management representation fell from 50.9% in 2016 to 41.6% in 2024.
"We built this analysis on the single most rigorous, consistent workforce data set that exists in the United States,” said Meredith Benton, Principal at Whistle Stop Capital and As You Sow’s Workplace Culture Program Manager. “EEO-1 forms are filed with the federal government in a standardized format, which means we can compare company data rather than relying on voluntary, selective corporate disclosures or claims. Capturing the Diversity Benefit is not an opinion about how companies should hire; it is a measurement of how manager diversity has actually correlated with financial performance. Sophisticated investors will include signals like this one, alongside other indicators, as they seek competitive advantages between companies."
The report arrives at a moment of acute risk for the underlying data itself. Recent federal actions have signaled that, after 60 years of reporting by companies with more than 100 workers and federal contractors with more than 50, the 2025 EEO-1 data collection may be stopped. This raises the prospect that investors will lose access to one of the few standardized, comparable measures of corporate workforce composition and, with it, the ability to make informed decisions that impact portfolio returns.
The report also found that transparency itself tracks with diversity: those companies that never voluntarily disclosed their EEO-1 data averaged only 19.3% BIPOC management, compared with 23.8% among voluntary reporters.
“The ongoing debate over corporate diversity is now being framed as a question of financial prudence,” said Danielle Fugere, President and Chief Counsel of As You Sow. “That framing cuts both ways. If a company dismantles a diversity program in response to political pressure rather than solid financial analysis, its Board risks breaching its fiduciary duty to act in the best interests of its shareholders. This report puts Boards on notice that they must review the financial evidence carefully before they act.”
Behar added, “If you are an asset manager and you are not looking at workforce composition data, you are simply not doing your job. Companies that overweight diverse management have historically been associated with stronger performance. Ignoring a signal like this may mean that an asset manager is not fulfilling their fiduciary duty by not collecting and reviewing data that could help them outperform.”
Join As You Sow today, July 23 at 10:00 AM PST, for a live webinar unveiling the third edition of Capturing the Diversity Benefit: Workforce Diversity Linked to Financial Performance. Attendees will be the first to see the updated findings, which draw on data from 1,482 companies over nine years.
As You Sow produced the Capturing the Diversity Benefit report in collaboration with Whistle Stop Capital. The full analysis, including sector-level and market-capitalization breakdowns, is available at asyousow.org.
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As You Sow is the nation’s leading shareholder representative, with a 30+ year track record promoting environmental and social corporate responsibility. As You Sow addresses a range of issues that affect shareholder value, including workplace diversity, ocean plastics, toxins in the food system, climate change, biodiversity, and racial justice. See As You Sow’s shareholder resolution tracker.