Here is a brief, thoughtful commentary provided by BNY Mellon Wealth Management that focuses on three separate but related —
and substantial — benefits of team diversity in the workplace. It is important to keep in mind that the most productive form of diversity is one of different points of views and even more productive when there is also diversity of gender and race. While chairman and CEO of GE, Jack Welch once suggested to a SVP, “If both of us agree on everything, one of us is redundant.”

OVERVIEW

At BNY Mellon Wealth Management, we believe we have a responsibility to improve lives through investing. Our commitment to creating an inclusive, sustainable world that encourages people to thrive informs everything we do, not just within our organization but also with our clients. Individual investors and asset managers have the opportunity to make direct social, market and global economic impacts with their investments — but that’s not the whole story. The evidence shows that in doing so, they also have the potential to generate significant financial returns, as well.

ANALYSIS

Companies that make a concerted effort to build diverse teams see gains in profitability that set them apart from the competition. Investors who recognize this have an opportunity to benefit by identifying companies that are designed to succeed in the modern marketplace.

1. Studies Show a Direct Tie Between Diversity and Performance: Companies in the top 25% for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians — 15% higher for gender and 35% for racial and ethnic diversity. For every 10% increase in racial and ethnic diversity on the senior executive team, earnings before interest and taxes (EBIT) rise 0.8%.

2. It Starts With the Leadership: Companies that want to reap these benefits need to have leaders who recognize the potential of a diverse team. Leaders who actually seek out and appreciate the opinions, perspectives and ideas from a wide range of employees are more likely to behave inclusively and unlock the innovative capacity of their team.

3. Women Executives Provide Added Benefits: The presence of women executives is associated with strong firm performance as measured by both gross and net margins. There is also evidence that female managers are better at engaging employees, by encouraging development, fostering a positive work environment and delivering consistent feedback and recognition.

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Here is a direct link to several other excellent resources at the BNY Mellon website.

These are among the best books about this important subject:

Inclusion: Diversity, The New Workplace & The Will To Change
Jennifer Brown

Driven by Difference: How Great Companies Fuel Innovation Through Diversity
David Livermore

The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy
Scott E. Page and Earl Lewis