Fact check: What study shows the companies with more diverse leadership show greater profitability. What hard numbers actually exist to back up this claim.

1. Summary of the results

The relationship between diverse leadership and profitability is complex and contested. The McKinsey studies, conducted over multiple years, consistently show positive correlations:

• Companies with gender-diverse executive teams are 21-25% more likely to have above-average profitability ^{[1] [2]}
• Companies with ethnically diverse executive teams are 33-36% more likely to outperform less diverse peers ^{[2] [3]}
• The research is extensive, covering over 1,000 companies across 12 countries ^[3]

2. Missing context/alternative viewpoints

Several important counterpoints and nuances exist:

• Academic research challenges these findings: Independent studies have found no statistically significant link between racial/ethnic diversity and financial performance ^[4]
• Replication attempts failed: Other researchers attempting to verify McKinsey's results found no statistically significant difference in financial performance ^[5]
• The Boston Consulting Group offers a more nuanced perspective: They found companies with above-average diversity had:
• 19% higher innovation revenues
• 9% higher EBIT margins

However, they emphasize that enabling conditions are crucial for realizing these benefits ^[6]

3. Potential misinformation/bias in the original statement

Several potential biases need to be considered:

• Correlation vs. Causation: The McKinsey studies show correlation, not necessarily causation. More successful companies might simply have more resources to invest in diversity initiatives.
• Commercial Interest: McKinsey, as a consulting firm, has a commercial interest in promoting these findings as they offer diversity-related consulting services.
• Evolution of Data: McKinsey's own numbers have changed over time, from 15% to 21% to 25% for gender diversity impact ^[1], suggesting potential methodology changes or inconsistencies.
• Selective Reporting: While positive correlations from McKinsey are widely cited, the contradictory academic research receives less attention ^{[4] [5]}