Why Diversity Builds Stronger Companies and a Better America

The term “diversity” gets thrown around quite a bit, sometimes making it feel like another vague corporate buzzword. But smart executives know that diversity should not be taken lightly. In fact, diversity is a very powerful concept with significant business advantages that are still poorly understood by most business leaders.

Many people assume that diversity benefits the individuals working within companies and organizations. It does, however its major benefits can be seen and measured at the organizational level. In fact, diversity can create a significant competitive advantage for corporations.

Let’s start with the boardroom. Research has shown that having more women and more ethnically diverse directors can yield major benefits for a company’s bottom line. 

According to McKinsey & Company,

·     The top 25% of the most gender-diverse companies are 15% more likely to outperform their peers.

·     The top 25% of the most ethnically diverse companies are 35% more likely to outperform their peers.

 Those are statistics that simply can’t be ignored, especially for businesses looking to scale up.

It has been about a decade since I was first elected to the board of a publicly-traded company. At that time, I was one of the only Latinas (and the youngest) serving in this capacity nationwide. Since then, I’ve become a director of two more public companies, and I’ve made it my mission to open doors for other women and minorities to do the same.

Thankfully, the companies I serve embrace diversity. But what about organizations that don’t understand the benefits that inclusion can bring?

Sometimes the best way to help companies understand the business case for diversity is through hard data. For example, the return on equity for Fortune 500 companies with more women board directors is 53% higher than for those with the fewest women board directors, according to a report from Catalyst.

My company is a good case in point. At Pinnacle Group, the company that I founded more than 23 years ago, I’m proud that almost two-thirds of staff at our headquarters are women, and nearly half are minorities. Many of our top leadership roles are also held by women. This happened organically by setting the tone at the top, reinvesting in our people, and evaluating our associates based on performance.  

Pinnacle Group’s diversity is a major factor that has helped lay the groundwork for our global expansion into four countries in the first half of this year. It has also contributed to our extraordinary growth over the years, placing Pinnacle on the Inc. 500/5000 list of the fastest-growing companies in the country 13 times and being named the fastest-growing woman-owned company in the country twice by the Women Presidents' Organization.  

Getting to this point has taken true commitment to investing in our people. To be effective at promoting diversity, organizations must implement a multi-pronged, multi-level strategy. They have to create the kind of environment that attracts and rewards top talent. Leaders must meet their associates where they are and provide them with opportunities that help them develop and excel. Only then can companies achieve true inclusion – the kind that helps both businesses and their employees flourish.

To help accomplish this at Pinnacle Group, we’ve developed an emerging leadership program. This is one of the ways we have fostered talent and harnessed the diversity of thought among our leaders. We give our associates the support and tools they need to utilize their unique entrepreneurial skills, which helps us grow and give back to the communities that have given us so much.

More work needs to be done to spread broader acceptance of diversity among American corporations. That’s why I proudly joined the Dallas-Fort Worth Steering Committee of the national 2020 Women On Boards campaign to increase the percentage of women on U.S. company boards to 20% or more by 2020.

And I am excited to report that, with the help of legislators, community activists, and brilliant women and men nationwide, we were able to achieve this goal a year early. A recent report released by governance data firm Equilar Inc. showed that women now hold 20 percent of board seats at the top 3,000 publicly traded U.S. companies. This is a major step towards achieving a truly diverse and inclusive corporate world.

We are on our way to getting there. In the end, a more diverse corporate world makes for a stronger economy, and with that, a stronger nation for us all.

Chairman & CEO of global workforce solutions provider Pinnacle Group, Nina Vaca is one of the few (and youngest) Latinas in the United States serving as a director of publicly traded corporations.