ELC Institute Journal - Winter 2022

The Executive Leadership Council Journal

A Research Journal for

Black Professionals

Winter 2022

The Executive Leadership Council Journal

A Research Journal for Black Professionals

Winter 2022

Copyright © 2022 by The Executive Leadership Council, Inc. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

ISBN 979-8-218-11598-2

Letter from the Editor ............................................................. 1

How do investors really react to the appointment of Black CEOs? ................................................... 3 by Seung-Hwan Jeong, Ann Mooney, Yangyang Zhang and Timothy J. Quigley

Band Aids Don’t Heal Bullet Wounds: Black Employees Need Organizational Justice ........................33 by Brenda Carter

It’s Time to Face the Flawless Leaders in Your Organization .....43 by Aurelia D. Gardner

Leaders Harmonize Fee Time, Free Time, and Me Time ............ 51 by Jeffery S. Perry

Examining the Impact of a Unique Early-Intervention Academic Program on 250 Inner-City Children ........................55 by Westina Matthews, PhD.

The Privilege of Potential ......................................................63 by Olu Burrell, MSOD, PCC

About the Contributors ..........................................................69

Letter from the Editor

It is Q4 when organizations are thinking about wrapping up the year and planning for the next year. In 2022, leaders dealt with return to the office or hybrid, the great resignation, rumors of recession, war, inflation -- to name just a few. What challenges will 2023 bring to leaders –ESG, inflation, labor shortages? Whatever 2023 challenges might be, without the right leaders at the helm, organizations will struggle, and some might fail.

Are Black leaders poised to lead in an ambiguous year? A common saying in the Black community is “You have to work twice as hard… Be twice as good” and on and on. Here is the good news, it turns out investors appreciate the exceptional capabilities Black CEOs bring.

In the article “How do investors really react to the appointment of Black CEOs?” the authors (Jeong, Mooney, Zhang and Quigley) argue biases and stereotypes are outweighed by investor appreciation for the higher bar for advancement that Black CEOs face. They show Black CEOs are appointed with, on average, more years of education, advanced degrees, and elite education than a comparable group of White CEOs. I will let you read and see the details of their findings.

Also in this issue are articles on four critical qualities for transformative leadership; how leaders can harmonize their work and life and more. We hope you find this issue helpful as you close out 2022 and prepare for 2023.

Ramien R. Pierre, Ed.D. Director, Institute for Leadership Development & Research The Executive Leadership Council

How do investors really react to the appointment of Black CEOs?

by Seung-Hwan Jeong, Ann Mooney, Yangyang Zhang and Timothy J. Quigley

A recent study found that markets react negatively to the appointment of Black CEOs, with an average cumulative abnormal return of −4.2%. The authors argue this is caused by investors invoking racial biases and stereotypes. In contrast, using a comparable sampling period and analytic approach, we find markets react positively to the appointment of Black CEOs with an average abnormal return of +3.1% (or +2.0% after conservatively addressing outliers). Our results are consistent across several alternative analyses, sample adjustments, and robustness tests. We argue racial biases and stereotypes in markets are outweighed by investor appreciation for the higher bar for advancement that Black CEOs face and the exceptional attributes they must exhibit as a result. To conclude, we discuss the implications of our findings.

SEUNG-HWAN JEONG is Assistant Professor at the University of Georgia Terry College of Business

ANN MOONEY is Associate Professor at Stevens Institute of Technology School of Business

YANGYANG ZHANG is Research Assistant at Stevens Institute of Technology School of Business

TIMOTHY J. QUIGLEY is Associate Professor at the University of Georgia Terry College of Business

AA RECENT STUDY found that markets react negatively (−4.2%) to the appointment of Black CEOs which the authors attribute to racial biases and stereotypes among market participants. If true, boards might be dissuaded from making such appointments out of concern for the firm’s stock price and their own shareholdings.

Using a comparable sample, we find the opposite with an average return of +3.1% for the appointment of Black CEOs. We argue biases and stereotypes are outweighed by investor appreciation for the higher bar for advancement that Black CEOs face. Specifically, we show Black CEOs are appointed with, on average, more years of education, advanced degrees, and elite education than a comparable group of White CEOs. We share data and code underlying our primary results.

INTRODUCTION

The Black Lives Matter Movement, murder of George Floyd, and other high profile events have amplified widespread societal concerns over racial discrimination. These effects have impacted the business community where diversity, equity, and inclusion initiatives have led firms to evaluate their activities, especially in areas related to hiring and employee development. Notably, this focus has extended to an examination of corporate leadership. Beyond issues of underrepresentation—just 4 CEOs1 in the Fortune 500 (0.6%) today are Black 2—there is growing interest in understanding how race affects the evaluation of top strategic leaders (Carton & Rosette, 2011; Gündemir, Carton, & Homan, 2019; Hill, Upadhyay, & Beekun, 2015). A recent study by Gligor, Novicevic, Feizabadi, and Stapleton (2021)3 addressed this issue by studying the market reactions to the announcements of executive appointments (CEOs and top management team [TMT] members) between 2001 and 2020. The authors found investors reacted negatively to the appointment of Black CEOs (the average cumulative abnormal return [CAR] was −4.31%) and positively to the appointment of White CEOs (average CAR was 0.58%), and theorized the reactions stemmed from investors’ racial biases and stereotypes. These findings have important theoretical implications for emerging research on race in corporate leadership, and normative implications such as the possibility that boards will be dissuaded from appointing Black CEOs due to a potential negative impact on their firm’s stock price and directors’ own shareholdings.

Given these possible implications, we undertook a study to understand why the reactions to Black CEO appointments were so negative. We followed an extensive, multi-prong approach (which we detail below) to reproduce the Gligor et al. sample and corresponding results. While their study included market reactions to TMT member appointments, that they also found were negative, we focused our study on the appointment of Black CEOs. In contrast to Gligor et al., we find that markets react positively to the appointment of Black CEOs with an average CAR of +3.1%. After addressing extreme positive outliers, the magnitude is somewhat lower but still positive, at +2.0%. Our results remain consistent in a multivariate analysis and a multitude of robustness tests. Finally, we find that insider/outsider status affects outcomes opposite the direction reported by Gligor et al.

Since our analyses yield different market reactions to the appointment of Black CEOs than reported by Gligor et al., we performed numerous tests aimed at reconciling our findings with theirs. In particular, our tests focused on understanding whether differences in our sample of Black CEOs might be causing the differences in results. Although we identified significantly more usable CEO announcements than Gligor et al. (4,609 vs. 1,662), we identified 57 Black CEO appointments that were usable for an event study during the same sampling frame, 2001–2020, compared to Gligor et al.’s sample of 83 Black CEOs.4 One of our tests shows that if we artificially add 26 additional Black CEOs to our sample, which would then equal the 83 reported by Gligor et al., the reaction to those appointments would need to average a −18.1% CAR to match their results, which seems unlikely. As we explain below, our other tests failed to reconcile our findings with Gligor et al., and each one yielded positive, rather than negative, market reactions to the appointment of Black CEOs.

To assess the soundness of our alternate findings, we considered possible theoretical underpinnings to the positive market reactions and found they are in line with theory that highlights how Black leaders face a higher bar for advancement. Consistent with the

common adage of minorities needing to “work twice as hard to get half as far” (DeSante, 2013), scholars have found that, compared to Whites, racial minorities are evaluated with more rigorous performance standards (Maume, 1999). Applied to leaders, this has been argued to limit career progression and helps explain why so few top executives today are racial minorities (Eagly & Chin, 2010; Rosette, Leonardelli, & Phillips, 2008). However, this explanation also highlights that racial minorities who ultimately attain senior roles must be especially qualified as compared to White leaders (Eagly & Chin, 2010; Hillman, Cannella, & Harris, 2002). As Eagly and Chin (2010) elucidate, “it is plausible that leaders belonging to diverse identity groups can perform especially well to the extent that they have had to meet a higher standard to attain leadership roles in the first place” (p. 219). While admittedly simplistic, we empirically considered whether Black CEOs face a higher bar for advancement by comparing the education of Black and White CEOs and found that Black CEOs exhibited more exceptional qualifications than the White CEOs in terms of years of education, advanced degrees, and elite education attainments.

It is through the accumulation of academic works, not individual studies, that we truly build knowledge of important phenomenon (Bettis, Helfat, & Shaver, 2016). Thus, our primary motivation with this study is to engage in transparent and collaborative research on this pressing topic of how race affects strategic leaders. In doing so, we present substantially different results than Gligor et al. and, in line with our commitment to transparency, we share the key data and code underlying our results.

Below we describe in more detail the theoretical background, methods, and results for our study. Next, we discuss the implications of our findings for multiple literatures including leadership diversity, strategic leadership, and succession. We also discuss suggestions for future research, including the benefits that can be derived from increased and more nuanced disclosure of data and results, as well as insights for practice. Finally, in the appendix, we provide a list of the Black CEO appointments in our sample, the White CEO appointments used in our matched sample

analyses, and the code used to generate market reactions to these appointment events. For each CEO, we include their names and firm affiliations, links to CEO pictures, the earliest announcement date found, and the market reaction (CAR).

BACKGROUND

The appointment of a new CEO is an informationally rich event that is of tremendous interest to investors (Gangloff, Connelly, & Shook, 2016). When a new CEO is appointed, investors undergo a simple calculus to assess the likelihood that the new CEO will perform better than, similar to, or worse than their predecessor and buy and sell shares accordingly (Quigley, Crossland, & Campbell, 2017). As such, market reactions to succession events can be used as an indicator of how investors view the attributes and prospects of the new CEO (Shen & Cannella, 2003). The Gligor et al. study builds on literatures related to succession, diversity, and strategic leadership and uses market reactions to examine whether investors are biased when the new CEO is Black. As noted, they report results consistent with the explanation of bias with an average CAR to the appointments of Black CEOs of −4.31%.

The authors theorize these effects have to do with investors invoking stereotypes that lead them to perceive Black CEOs as less effective and capable (Ozier, Taylor, & Murphy, 2019), and at odds with society’s view of the prototypical leader as White and male (Lord, Foti, & De Vader, 1984; Lord, Foti, & Phillips, 1982). Their theory is consistent with several studies reporting evidence about racial minority leaders—though not CEOs specifically— receiving weaker performance evaluations and attributions (Park & Westphal, 2013; Rosette et al., 2008), lower compensation (Guest, 2017) and fewer promotions (Greenhaus, Parasuraman, & Wormley, 1990; Powell & Butterfield, 1997), which may be more pronounced for Black leaders given the especially negative stereotypes about them that persist in society (Rosette et al., 2008). Gligor et al. note that negative investor perceptions are then reinforced by the tendency to link Black CEOs with more negative future firm performance given research indicating racial minority

CEOs are disproportionately appointed to lower performing firms, a phenomenon referred to as the “glass cliff” effect (e.g., Cook & Glass, 2014; Gündemir et al., 2019)

However, we argue that while new Black CEOs likely experience the negative effects argued by Gligor et al. (and many other biases), there is ample theory suggesting a possible countervailing effect relevant to Black leaders as they ascend to the highest levels of the organizational hierarchy. It is welldocumented that racial minorities need to contend with a higher bar for advancement than Whites (DeSante, 2013; Rosette et al., 2008). 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. As a result, newly appointed Black CEOs are likely to exhibit exceptional attributes relative to their White counterparts. For example, in the context of boards, Hillman et al. (2002) argued that for a “racial minority to be perceived as having high ability, he/ she must have more evidence of that ability than the evidence required to judge a White male’s ability” (p. 750). This same study showed that racial minority directors had more advanced degrees than White directors.

Black CEOs are also likely to be appreciated for having unique qualities. For example, their diversity in relation to the White corporate mainstream may afford them the ability to better understand different customer target markets and employee bases (Brammer, Millington, & Pavelin, 2007) and expand the perspectives considered during decision making (Miller & Triana, 2009; Richard, 2000). Supporting this, Miller and Triana (2009) found that racial diversity on boards led to stronger innovation and reputation which, in turn, positively influenced firm performance. By virtue of their minority status, Black CEOs can also signal to stakeholders that the firm takes diversity seriously, yielding a multitude of benefits such as job satisfaction and retention among diverse employees (McKay et al., 2007) which, by extension, would positively impact the firm. Finally, given the paucity of Black CEOs in corporate

leadership, it is plausible that, without even considering the CEO’s qualities, investors may deem them especially capable for having beaten the odds to be appointed to the pinnacle of corporate leadership.

Under this alternative view, represented by a higher bar for advancement, it would follow that investors would react positively to the appointment of Black CEOs, perhaps even more so than to the appointment of White CEOs. While the negative stereotypes may persist, these may be outweighed by these positive influences and yield net positive perceptions that are observable through market reactions to newly appointed CEOs. As Eagly and Karau (2002) put it in relation to female leaders, “This effect presumably occurs because perceivers augment the causal importance of a force (i.e., task competence) that they believe has prevailed over a countervailing force (i.e., discrimination)” (p. 583). Aligned with this view, Hill et al. (2015) found racial-minority CEOs received greater compensation than White CEOs.

Gligor et al. also found that hiring from inside the firm, versus outside, moderated reactions to CEO appointments such that outsider black CEOs were associated with larger negative reactions. While we do not offer any a priori logic about this result, our analysis addresses this relationship as well.

METHODS

Data and sample

Our study started with reproducing, as best as possible, the Gligor et al. sample of 83 Black CEO appointment announcement events between 2001 and 2020. Like Gligor et al., we performed media searches in LexisNexis and Factiva. We used a broad list of search terms including “appointed CEO,” “named new CEO,” “succeeds and CEO,” “step down and CEO,” “replaces and CEO,” “take over and CEO,” and “to become CEO” (we also searched each of these phrases replacing “CEO” with “chief executive officer”) and recorded the name, company, and earliest announcement date for any CEO appointment we could

find. In some cases, this meant a CEO began serving during our sampling frame but was excluded because their appointment was announced before our sampling frame. For example, Kenneth Chenault, the CEO of American Express and the third Black CEO to run a Fortune 500 company, assumed office in 2001 but is not in our sample because his appointment was first announced in April 1999.

To ensure we found as many Black CEOs appointments as possible, we also performed targeted searches for lists of Black CEOs—of which there are many, such as “The Most Influential Black Executives in Corporate America” (Savoy, 2020), “Top Black CEOs” (Samaha, 2021), “Black Enterprise’s the Most Powerful Executives in Corporate America” (Dingle, 2017), “The Elite 100 Black Women Executives” (Sykes, 2021)—and then used the CEO and corresponding company names in LexisNexis and Factiva searches for the earliest announcements of these appointments.

Our media search yielded 8,421 CEO appointment announcements, and we further filtered these cases using the same process described by Gligor et al. We dropped 40 cases that were appointments to subsidiaries and 4,895 cases that were appointments to non-publicly traded companies (private and nonprofit organizations). Among the remaining 3,486 cases, we dropped 390 cases related to “pinksheet” or OTC listed firms not covered by CRSP (where Eventus obtains stock market data) and 310 cases with insufficient stock market data for an event study (e.g., due to a merger or IPO during the estimation window). After these removals, 2,786 cases remained. We then coded CEO race using a detailed process we describe below. All CEOs were considered in our coding, including the CEOs we identified through the targeted search for Black CEOs (e.g., lists of Black executives), to ensure those lists did not have errors (we did not find any). Altogether, these broad and targeted media searches yielded a total of 2,652 usable Black or White CEO appointments, of which 49 were coded as Black and 2,603 were coded as White. We also identified 107 Asian and 27 Hispanic/Latinx CEOs that we did not include in our analyses.

We were surprised that our media searches yielded 34 fewer Black CEOs than reported by Gligor et al. especially given our media search yielded 67.6% more total usable CEOs (2,786 for our searches versus 1,662 for Gligor et al.). This is a notable difference in total appointments, especially when one considers that the Gentry, Harrison, Quigley, and Boivie (2021) database of CEO turnover reports 5,841 turnovers in this period among firms covered by Execucomp, which is roughly (and more narrowly) focused on the S&P 1500. We were also struck by the differences in the proportion of Black CEOs relative to the total CEO appointments that we found (2% in our sample vs. 5% for Gligor et al.).

In light of these differences, we took additional steps to seek out Black CEO appointments we might have missed in our media searches. Specifically, we searched for Black CEOs in three commonly used databases—Execucomp, Institutional Shareholder Services (ISS) database (a database of directors from which we extracted CEOs), and the Gentry et al. (2021) database of CEO succession events. These databases include information for senior leaders of S&P1500 firms but have some differences in coverage. For example, the ISS database captures independent directors of S&P1500 firms who might have full time positions as CEOs in firms outside the S&P1500. Given the visibility S&P1500 firms, these CEO appointments are more likely to be covered by the media. Thus, we anticipated that the database search would result in a large overlap with the appointment announcements we found through our media search. However, we also anticipated that we would find additional Black (and White) CEOs because we could use CEO and company names from these databases to search LexisNexis and Factiva for appointment announcements missed using the general search terms outlined above. This allowed us to capture CEOs we may have missed but which may have been captured by Gligor et al., perhaps because they used different search terms (we were unable to replicate perfectly the Gligor et al. search terms as they were not disclosed in the study).

The database search for Black CEOs involved identifying all unique CEO appointments between 2001 and 2020 while excluding cases for the same reasons detailed above with the media searches. We then performed searches in LexisNexis and Factiva to identify each CEO’s earliest appointment announcement date, again dropping CEOs where this was outside the 2001–2020 sampling frame. Finally, we coded the race of these CEOs using the process detailed below. Altogether, this database approach identified 1,957 appointment announcements not captured in the media search, of which 8 were coded as Black and 1,949 were coded as White (as with the media search sample, other minority CEOs were excluded).

In total, our final sample includes 4,609 total usable appointments where the announcement date could be identified and where there was sufficient market data for Eventus—57 Black and 4,552 White CEO appointments. Compared to Gligor et al.’s sample, we had 26 (or 31%) fewer Black CEO appointments (57 compared to their 83) and 2,947 (277%) more total appointments (4,609 compared to their 1,662). Our sample of 57 Black CEO appointments is listed in the appendix.

Our sample includes confounding events that are typically excluded from traditional event studies (McWilliams & Siegel, 1997). Of the 57 Black CEO appointments, 12 are interim appointments or have other confounding events within plus or minus 3 days of the event (1 is both an interim appointment and has another confounding event; 7 are interim appointments only; 4 have other confounding events only). We would typically exclude these confounding events; however, to maximize the number of Black CEO appointments and create a sample as close in number to Gligor et al. as possible (who did not describe how they treated confounding events), we include all of these events in our primary analyses. We also include three events where an interim CEO was later named to be the permanent CEO (e.g., these three CEOs were captured for two separate dates each). Eliminating interim CEOs and other confounding events (but including the 3 interim CEOs only when

they became permanent) resulted in a reduced sample of 45 Black CEO appointments. We report results for both samples below and the conclusions are the same.

Variables

■ CEO Race

Consistent with Gligor et al., our study’s focus was on Black CEO, a binary variable that took the value of 1 for Black CEOs and 0 for White CEOs. Our coding process, similar to Gligor et al., involved two independent coders coding CEO race using online biographical information, profiles, pictures, and public mentions of CEOs. We also identified Black CEOs using public lists of Black executives. As Gligor et al. did in their study, our broader coding scheme for CEO race also included the categories of Asian (South and East Asian) and Hispanic/Latinx. The race determined by the two independent coders matched 96% of the time.5 Disagreements were resolved through further investigations by the coders and coauthors as a group. As an additional accuracy check, a third experienced coder compared the racial conclusion of the research team with the sources noted above and did not find any errors.

Of the 57 Black CEO appointments in our final dataset, we found evidence of 58% of them self-reporting race (e.g., in an interview or otherwise) compared with 74% of Gligor’s sample of Black executive appointments (which included CEOs and TMT members). For White CEOs, we randomly checked 50 cases, and found one CEO (2%) that self-reported race. Gligor et al. found 21% of White CEOs self-reported race.

As described above, we following Gligor et al.’s race coding scheme which did not include multi-race categories. While we accordingly did not perform deliberate searches for information capturing the multiracial backgrounds of CEOs, in two instances—John Agwundobi of Herbalife and Rene Jones of M&T Bank—we discovered information in our media search indicating that the CEOs were bi-racial with one biological parent who was Black and the other who was White. We

include these two CEOs in our sample of Black CEOs given suggestions in the media that they are perceived as Black (e.g., appeared on lists of Black CEOs, referred to as Black in press releases issued by their firm) as well as research showing that, depending on certain conditions, individuals exhibit a tendency to perceive others as Black when they are multiracial (e.g., both Black and other racial backgrounds) (Ho, Kteily, & Chen, 2017; Ho, Sidanius, Cuddy, & Banaji, 2013). However, removing the two CEOs from our Black CEO sample had no impact on the conclusions drawn from our analyses.

■ Moderator and control variables

Following Gligor et al., we measured the moderator, CEO insider/ outsider status, as a binary variable that took the value of 1 when the CEO was promoted from inside the firm and 0 when the CEO was hired from outside the firm. The control variables included were the same as Gligor et al. Reason for appointment was coded as 1 for unusual circumstances using the same reasoning noted by Gligor et al. (e.g., firm was acquired, management restructuring, involuntary resignation of previous CEO) and 0 otherwise. Prior firm performance was measured as the previous year’s return on sales (net income over total revenue) and firm size was measured as the logarithm of total assets. Technical influences were accounted for using multiple measures. The market model root mean square error (RMSE) and firm beta (BETA) variables were retrieved from Eventus using the SAS interface and the same Eventus specifications noted below (WRDS, 2021). We controlled for market-to-book ratio measured as market value of total assets over book value of total assets. Institutional holdings was measured as the percent of shares owned by institutional investors as provided in the Thomson/Refinitiv Institutional (13f) Holdings dataset. Finally, for CEO attributes, previous experience as CEO was coded as 1 if the new CEO had prior experience as a CEO and 0 otherwise; industry insider was coded as 1 if the CEO was appointed from the same industry and 0 otherwise; age was

measured as the total age in years at the time of appointment, and female CEO was coded as 1 if female and 0 if male.

Analysis techniques

■ Event study

We used Eventus to perform a standard financial event study, which uses abnormal stock returns measured during the time news is released about noteworthy events to capture investors’ reactions to and perceptions of those events (Feldman, Amit, & Villalonga, 2016; Zhang & Wiersema, 2009). Consistent with Gligor et al., we considered the CARs, which are the sum of daily abnormal returns—the difference between actual returns and normal (or expected) returns on a given day—using a 3-day (−1 to +1) event window, with the event (Day 0) being the earliest announcement of the CEO’s appointment. Following Gligor et al., we obtained normal returns using the market model, estimated by ordinary least squares regression using data from a 240-day estimation window, ending 20 trading days before the CEO appointment announcement event. When stock market data were not available for a given day (e.g., a weekend or holiday), we used data from the next trading day (e.g., the Eventus auto date option).

While Gligor et al. calculated p-values for mean CARs using a bootstrapping methodology, we rely on non-bootstrapped p-values because even the smallest sample size in our analysis (N = 45 Black CEOs) is above the common threshold of 30 beyond which samples approximate a normal distribution (Ross, 2017). Our conclusions do not change when using bootstrapped p-values (bootstrapped p-values were uniformly smaller than what we report).

■ Matched sample analysis

We followed Gligor et al.’s matched sample approach to allow for a test of differences in market reactions to the appointment of Black versus White CEOs. This involved identifying a sample of White CEOs using the same matching criteria applied by

Gligor et al.—gender (exact match), year of the event date (exact match), and firm value measured as logged market capitalization (coarsened exact matching). The matching was performed using the coarsened exact matching (cem) command in Stata 16. See Appendix B for a listing of the matched White CEOs in our sample.

■ Multivariate regression

Following Gligor et al., our analysis also included a multivariate OLS regression. We modeled these tests as Gligor et al. did, using the CAR as the dependent variable, and CEO race, insider/ outsider status, the interaction of CEO race and insider/outsider status, and controls noted above as predictors. To mitigate the influence of outliers, all continuous predictor variables were Winsorized at the 1% level (i.e., 1st and 99th percentiles) prior to matching or inclusion in regression models. To ensure outliers within our outcome variable are not unduly influencing our findings, we report results using both un-Winsorized and Winsorized versions of our dependent variable.

RESULTS

Table 1 provides descriptive statistics about the firms that appointed Black CEOs compared with the firms that appointed the matched White CEOs. As expected, there are no meaningful differences in market capitalization between the two groups given our coarsened exact matching on this variable. Firm size (logged total assets) is also not meaningfully different between the two groups, helping to rule out size differences as a confounding factor in our analyses. Interestingly, there is some indication that prior firm performance (i.e., performance in the year prior to the year of CEO appointment) may be lower in companies that appointed Black CEOs compared to White CEOs (previous ROS of −0.08 for Black CEOs and 0.00 for White CEOs, t-test p-value = .16).

TABLE 1. Descriptive statistics for Black and matched White CEO appointment samples

Variables

Prior firm performance

RMSE Beta

MTB Age

Female CEO

Total assets (logged) Institutional holdings Reason for appointment Previous experience as CEO Firm insider Industry insider Market cap (logged)

Black CEOs (N = 57) Mean SD

Matched White CEOs (N = 57)

0.60 0.32 0.25 0.46 0.88

Abbreviations: MTB, market-to-book ratio; RMSE, root mean square error.

0.33 0.47 0.43 0.50 0.33

Mean SD -0.08 0.03 1.32 1.14 53.68 0.07 7.86 7.41

0.39 0.02 0.59 1.49 5.92 0.26 2.65 2.53

Overall market reaction to Black CEOs

0.00 0.02 1.08 0.97 52.35 0.07 7.78 7.32

0.62 0.14 0.37 0.65 0.93

0.27 0.35 0.49 0.48 0.26

0.23 0.01 0.50 0.78 6.70 0.26 1.96 2.13

Our univariate event study results are reported in Panel a of Table 2. Gligor et al. found that investors reacted negatively to the appointment announcements of Black CEOs in their sample (average CAR of −4.31%) and that the difference between those reactions and reaction to White CEO announcements (who had an average CAR of 0.58%) was meaningful (t = 3.57; p = .001). Our main sample analysis shows that investors, on average, react positively to the appointment of Black CEOs (mean CAR of 3.11%), and the difference between those reactions and the reactions to the matched sample of White CEOs (who had an average CAR of −0.91%) is substantial (difference in average market reaction of 4.02%; t = −2.15; p = .03). After Winsorizing at the 1% level (i.e., at the 1st and 99th percentiles) within our entire sample of CEOs,6 the mean CAR for Black CEO announcements is a slightly smaller (2.00%), but the conclusions remain the same. That is, investors react more positively to Black CEO appointment announcements than

White CEO appointment announcements. We also find the mean CAR for all White CEOs (n = 4,552) is close to zero (−0.01%) and that the market reaction to Black CEOs is larger (p = .01).

TABLE 2. Event study results: Univariate tests

Panel a. Main sample

Sample N Positive: negative CAR [ 1, +1] (%) t-test p-value t-test p-value Winsorized CAR ($) Standardized cross-sectional test p-value

Black CEOs

Matched White CEOs All White CEOs

57 31:26 3.11 .070.082.00 .09 57 24:33 −0.91 .270.29 −0.92 .25 4,552 2,211: 2341 −0.01 .910.350.04 .73

Comparing Black CEOs and matched White CEOs: t = 2.15 (p = .03)

Comparing Black CEOs and matched White CEOs (Winsorized CAR): t = 2.10 (p = .04)

Comparing Black CEOs and all White CEOs: t = 2.69 (p = .01)

Panel b. Reduced sample: Excluding confounding events and interim appointments

Sample N Positive: negative CAR [ 1, +1] (%) t-test p-value t-test p-value Winsorized CAR ($) Standardized cross-sectional test p-value

Black CEOs

Matched White CEOs 45 27:18 3.76 .040.012.66 .01 45 22:23 0.33 .680.410.31 .69

Comparing Black CEOs and matched White CEOs: t = 1.78 (p = .08)

Comparing Black CEOs and matched White CEOs (Winsorized CAR): t = 1 .86 (p = .07)

Note: All p-values are two-tailed.

To ensure these findings are not driven by unique conditions surrounding the appointment announcements, we repeat the event study on a reduced sample of Black CEOs and White CEOs that exclude interim CEO appointments and other confounding events. The results are consistent. The mean CAR is 3.76% for Black CEOs and 0.33% for White CEOs (mean difference test: p = .08). (See Panel b, Table 2).

In Table 3, we report descriptive statistics and correlations for the variables used in our multivariate tests. Table 4 reports our multivariate results. For these analyses, we multiplied our dependent variable (CAR) by 100 to ensure reported coefficients displayed a reasonable number of significant digits (e.g., we wanted to avoid betas displayed as 0.00; we did the same for RMSE to maintain comparable scale). Models 1, 2, and 3 use raw CARs while Models 4, 5, and 6 use Winsorized CARs. The largest variance inflation factor value for any variable across all models was 2.9, which is well below common thresholds used to detect multicollinearity. Models 1 and 4 include control variables only.

TABLE 3. Correlations and descriptive statistics: Black and White CEO 1:1 matched sample (N = 112)

Variables Mean SD 12 34 5 67 89 10 11 12 13 14

CAR [ 1, +1]

1.10 10.13 1.00 0.54 7.55 0.92 1.00 0.03 0.02 0.25 0.14 1.00 1.20 0.56 −0.01 −0.06 1.00 0.49 1.06 1.19 0.15 0.23 1.00 −0.13 −0.08

Winsorized CAR [ 1, +1] 53.02 6.33 −0.08 −0.09 −0.01 0.07 0.14 1.00 0.07 0.90 0.31 0.23 0.42 −0.10 −0.11 0.10 0.13 −0.18 0.18 −0.07 0.04 0.00 1.00 1.00 1.00

RMSE Beta MTB Age Female CEO Industry Insider Previous Experience Reason For Appointment Firm Size Institutional Holdings Prior Firm Performance Black CEO

Insider

0.30 −0.13 −0.02 −0.07 −0.08 −0.01 −0.03 −0.03

0.46 0.05 0.00 0.11 0.13 0.09 −0.01 −0.06 −0.03

0.26 −0.10 −0.12 −0.08 −0.05 −0.06 −0.06 1.00 1.00 1.00 0.48 0.32 1.00

7.82 2.32 −0.25 −0.21 −0.50 −0.16 −0.37 −0.04 0.08 0.13 −0.07 0.05 0.61 0.30 −0.22 −0.17 −0.27 0.16 −0.11 0.05 −0.03 0.08 −0.15 0.01 0.23 −0.04 0.32 −0.34 −0.36 −0.52 −0.21 −0.31 0.05 0.10 −0.03 −0.09 0.00 0.55 0.50 −0.17 −0.14 −0.16 −0.18 −0.15 −0.31 0.04 0.36 −0.20 −0.10 0.22 −0.02 0.20 1.00 0.50 0.50 0.20 0.19 0.20 0.22 0.07 0.11 0.00 −0.09 −0.13 0.21 0.02 −0.04 −0.13 −0.19

Abbreviation: CAR, cumulative abnormal return.

TABLE 4. OLS regressions predicting CAR [−1, +1] using matched sample

Variables 12 3 4 5 6

RMSE

Beta

MTB

Age

Female CEO Industry Insider

Previous Experience as CEO Reason For Appointment

CAR [-1, +1] CAR Winsorized 0.67 (.47)

0.94 (.32) 0.65 (.48) 0.06 (.93) −0.14 (.83) −0.16 (.82)

−2.64 (.20)

−2.25 (.27) −2.27 (.26) −1.64 (.28) −1.94 (.20) −1.68 (.26) 0.33 (.74) −0.04 (.97) 0.05 (.96) 0.54 (.46) 0.33 (.65) 0.27 (.71)

−0.15 (.36) −0.12 (.44) −0.15 (.33) −0.15 (.21) −0.15 (.19) −0.13 (.27)

−3.41 (.35) −3.63 (.31) −3.61 (.31) −2.99 (.27) −3.14 (.24) −3.15 (.23)

−2.87 (.41) −2.83 (.41) −2.77 (.42) 0.82 (.75) 0.89 (.73) 0.85 (.74)

−0.43 (.84) 0.50 (.82) 0.37 (.86) −1.26 (.43) −0.66 (.68) −0.57 (.72)

−2.44 (.30) −2.85 (.22) −0.23 (.66)

−3.13 (.18) −1.75 (.31) −2.28 (.19) −2.08 (.23)

Firm Size Institutional Holdings Prior Firm Performance Black CEO Black CEO x Insider

Insider

−0.06 (.91) −0.01 (.98) −0.28 (.61) −0.17 (.67) −0.14 (.72) −1.84 (.61) −2.48 (.50) −1.48 (.58) −2.05 (.57) −1.16 (.66) −1.01 (.70) −7.03 (.07) −6.96 (.08) −6.74 (.02) −6.78 (.08) −6.60 (.02) −6.78 (.02) 1.66 (.59) −2.55 (.27) −2.57 (.13) −1.85 (.42) −2.04 (.23) 0.42 (.86)

7.21 (.01) 3.81 (.06) 2.86 (.06)5.25 (.01) −6.40 (.09) −4.49 (.11)

Constant 11.55 (.29) 15.58 (.15) 12.11 (.13) 16.29 (.13) 12.64 (.11) 9.32 (.25)

Observations 112 112 112 112 112 112

Adjusted -squared .14 .10.10.12.13 .14

R

Note: p-Values in parentheses.

Abbreviation: CAR, cumulative abnormal return.

In Models 2 and 4, we test the main relationship between CEO race and market reactions. These multivariate results are directionally consistent with our univariate tests and show that race (Black CEO) is positively associated with CAR (β = 3.81, p = .06 for raw CARs and β = 2.86, p = .06 using Winsorized CARs).

Using the Winsorized dependent variable in Model 5, which we believe provides the most appropriate test, our results show that markets react more positively to the appointment of Black CEOs than White CEOs by a margin of 2.86 percentage points.

To put this in perspective, the median market capitalization of the firms in our matched pair sample is $1.56 billion. Our results suggest the median firm appointing a Black CEO sees a market capitalization gain of $44.6 million relative to a similar firm appointing a White CEO.

In Models 3 and 6, we introduce the moderating effect of a CEO’s origin from inside or outside the firm. Using the Winsorized CAR, rather than finding that outside Black CEOs are associated with more negative reactions, as Gligor et al. report, we find that outside Black CEOs are associated with more positive reactions (Black × insider β = −4.49, p = .11). In Figure 1, we plot the interaction. Notably, the only condition that is different (nonoverlapping confidence intervals) from the others is the combination of Black and outsider (marginal effect 3.88, p = .01, 95% CI 1.16–6.61). Marginal effects for the other conditions are all negative with confidence intervals that overlap with zero.

Figure 1. Interactive effect of race and insider status on market reactions to new CEO appointments

Alternative analyses

We are aware that the differences in our sample of Black CEO appointment announcement events could potentially be affecting our findings. To address this, we performed a series of supplemental analyses to test the robustness of our results and potential avenues for reconciling our findings with those presented by Gligor et al.

First, we consider the possibility that we might have miscoded some of our CEOs as White when they were Black. For this analysis, we perform 1,000 iterations where we randomly select 26 White CEOs and recode them as Black. We then record the mean CAR of this new sample of 83 cases (e.g., the size of the Gligor et al. sample). The mean CARs from this analysis were never negative, ranging from 0.72 to 3.37%.

Second, we consider whether Gligor et al. may have inadvertently coded White CEOs as Black when the CEOs had distinctively Black names. To test this, we search our list of White CEOs for names that occurred on lists of distinctly Black names (Bertrand & Mullainathan, 2004; Cook, Logan, & Parman, 2016). We found 12 CEOs with such names, recode them as Black, add them to our sample (making it n = 69), and repeat the event study analysis using Eventus. The mean reported CAR for this sample was 2.90% (p = 0.05).

Third, we perform an analysis presented by Gligor et al. by recoding 10% of White CEOs as Black and 10% of Black CEOs as White. Following Gligor et al., we repeat this analysis 100 times. The CAR outcomes for Black CEOs are always positive, ranging from 0.90 to 4.29%.

Fourth, we consider if our findings can be explained by our reliance on identifying our sample from both media and database searches compared to Gligor et al. who focused on a media search only. For this analysis, we only consider the 49 Black CEOs from our search of media coverage. The mean CAR here is 3.75% (p = .05).

Fifth, we consider the possibility an alternative event date was used. Our primary analysis considered the earliest article following common event study methodology, but perhaps Gligor et al. considered the date with the most articles. For this analysis, we counted the number of articles covering the new CEO appointment by date and captured the one with the most articles. Out of 57 Black CEO appointments, 27 (47%) have a peak media coverage date different than the earliest date we originally coded. Of these, 19 were within 2 days of the earliest coverage date we identified. Using the alternative dates, we find a CAR of 2.52% (p = .14).

Sixth, we consider if assessing market reaction around the CEO’s start date rather than date of earliest appointment announcement might affect our results. Twenty-seven (47%) of our Black CEOs have start dates and announcement dates that coincide. The remaining CEOs have announcement dates that preceded their start date by an average of 86 days. The CAR using start dates was 2.65% (p = .11).

Seventh, we considered the possibility that our findings were driven by extreme positive outliers in our sample. Indeed, the most positive raw CAR in our sample of 57 Black CEO appointments was 69%. The next highest was 34%. After dropping (rather than Winsorizing) these two outliers, the resulting mean CAR is 1.34% (p = .23). Of course, this only reflects removing extreme positive cases and does not address extreme negative cases. Winsorizing or removing the most extreme negative events naturally yields a larger positive CAR and a substantially reduced p-value. Regardless, the mean CAR for Black CEOs remains positive.

Eighth, using our sample of 57 cases, we consider the possibility that our results differ from Gligor et al. because the additional 26 cases of Black CEO appointments they found but we missed were all substantially negative. We then calculate how negative those cases need to be to make our results match Gligor et al. To make this test more conservative, we use our Winsorized sample which has a CAR of 2.00% versus

Gligor et al.’s result of −4.30%, a difference of −6.3 percentage points. To reduce the mean CAR of our Winsorized sample by that amount, the average market reaction for the additional 26 cases would need to be −18.1% (this value would be −20.5% in our unwinsorized sample). We also consider what it would take to reduce our mean CAR to zero, which would entail adding 26 cases with a mean CAR of −4.38%. While we may be missing Black CEO appointment events, and we certainly make no claim that our data are without error, it seems unlikely the missing cases are uniformly this negative. Indeed, as shown in the appendix, our sample only has seven Black CEOs with CARs more negative than the mean of −4.3% reported by Gligor et al.

Finally, we also considered the possibility that Gligor et al.’s coding of Black CEOs was more expansive such that it includes Hispanic/Latinx CEOs. While not the focus of our paper, we found 27 usable Hispanic/Latinx CEOs in our data collection through media searches and, coincidentally, that is similar in size to the gap of 26 cases between ours and Gligor et al.’s usable sample of Black CEOs. When we combine these 27 CEOs with our 57 Black CEOs, the mean CAR remains positive at 1.86% (p = .14). Assessing our “high bar” theory

Earlier we argued that markets might react positively to the appointment of Black CEOs because, to even be considered, a Black CEO candidate must be exceptional. We test this idea three ways. First, we consider the years of education of newly appointed Black versus White CEOs. Black CEOs in our sample have, on average, 1.6 more years of education than White CEOs (18.9 vs. 17.3 years; t test p = .00). Next, we consider advanced degrees. Again, Black CEOs are more likely to have an advanced degree. Specifically, 93% of Black CEOs (e.g., 53 of 57 in our sample) have advanced degrees compared to 53% of White CEOs (difference t test p = .00). Finally, we consider elite education status using the list of schools from Gomulya and Boeker (2014) and find that Black CEOs are more likely to have an elite degree. Specifically, 61% of Black CEOs and 44% of

White CEOs have elite degrees (difference t test p = .06). While these tests are only suggestive, it appears that Black CEOs possess higher levels of education and more elite degrees than the matched pair sample of White CEOs, offering at least some support for our “high bar” theory.

DISCUSSION AND CONCLUSION

A primary goal of science is the development of knowledge by establishing the empirical generalizability of a particular phenomenon of interest (Hubbard, Vetter, & Little, 1998). It is rare that one study establishes generalizability, but rather it comes from a series of studies that can examine the robustness of past research, and extend it by considering new contexts and applying different empirical approaches (Ethiraj, Gambardella, & Helfat, 2016). Like constructing a building, the first studies form the foundation, with future studies extending on it brick by brick. We hope that our study can be considered with the Gligor et al. study—one of the first to consider investor reactions to Black CEOs—to ensure a solid foundation for future research. Rather than finding a negative reaction (CAR) to the appointment of Black CEOs, we find that investors react positively. Further, rather than finding that investor reactions are amplified and even more negative in the case of Black outside CEOs, we find outsider status made the reaction even more positive.

As discussed, we did not find as many Black CEO appointment announcements as Gligor et al. despite considering a substantially larger total number of CEO appointment announcements. Based on our alternative analyses, we do not believe these sample discrepancies explain the differences in results reported by this study and Gligor et al. However, we do believe that the sample differences point to the value of making data public to ease replication work (Ethiraj, Gambardella, & Helfat, 2017). Our challenges also highlight the need for more consistent and extensive disclosure of descriptive statistics. For example, Gligor et al. did not include the CAR, the dependent variable in their multivariate regression, in their correlation table, or report the standard deviation of this variable, making it difficult for us

to assess if outliers were driving their results. While journal editors and publishers consider policies of increased data and code disclosure, we believe scholars in our field should more readily embrace reasonable requests to share data and answer questions about research methods. As a collaborative field, this type of collegial engagement should be the norm regardless of journal policies.

We also believe our work offers important theoretical contributions. In many respects, Gligor et al.’s findings are what one might expect based on the large literature underscoring the biases and unfair practices racial minority leaders face in their careers (Carton & Rosette, 2011; Dreher & Cox, 2000; Rosette et al., 2008). However, our findings lend support to the argument that there is a countervailing force that emerges as a result of Black leaders needing to contend with a higher bar for advancement. That is, throughout their careers, Black professionals must repeatedly exhibit exceptional attributes that only compound as they advance to the most senior leadership positions (Eagly & Chin, 2010; Hillman et al., 2002). Indeed, we observed such exceptionality in our study, with Black CEOs in our sample having more years of education, advanced degrees, and elite education than their White counterparts. In sum, while Black CEOs undoubtedly face substantial headwinds ascending to the highest levels, it seems investors are keenly aware of the exceptional capabilities of those who ultimately become CEO.

Our findings also suggest different normative implications than those offered by Gligor et al. By showing investors react negatively to the appointment of Black executives (CEOs and TMT members), Gligor et al.’s results might dissuade boards from appointing Black leaders, which is concerning given that 12.4% of the U.S. population is Black (U. S. Census Bureau, 2011) but there are just 4 (0.8%) Black CEOs among Fortune 500 firms today. Our finding that investors react positively to Black CEO appointments might encourage boards to help improve this representation by considering comparably qualified candidates of all races.

Care must be taken when interpreting our findings. First, we are not suggesting a causal relationship. Firms cannot expect a positive reaction to the appointment of any Black CEO. Rather, our results are likely driven by the fact that Black individuals appointed to be CEO are exceptional. Moreover, we are not suggesting that the financial markets will resolve systemic disadvantages experienced by Black leaders. To the contrary, our findings suggest that Black leaders are required to meet a higher bar for advancement and point to the need to level the playing field for advancing up the organizational hierarchy. Especially in the wake of recent social movements, firms have been grappling with these issues with mixed success. One approach that our results suggest is that firms should perform regular assessments to identify high potential racial minority workers who are experiencing slower advancement through the organization and providing the support and sponsorship they need to successfully advance. Interventions are often discussed in terms of offering racial minority leaders greater professional development opportunities, but our study suggests that the focus should also be on creating more equitable promotion standards and systems that root out biases and emphasize clear and consistently applied criteria for evaluating and promoting leaders in the firm. Indeed, our findings suggest that boards are not considering Black CEO candidates as often as they should. If our theory is correct, such that CAR differences are driven by the exceptional credentials and capabilities (such as advanced degrees and elite education) exhibited by Black CEOs relative to White CEOs, then it is possible that the CAR differences only go away when firms start to neutralize those differences by considering Black and White candidates with more equivalent credentials and capabilities. That is, Black CEO candidates should not have to be more exceptional than their White counterparts just to be in the pool for consideration.

Our study is not without limitations. First, we did not examine Gligor et al.’s TMT appointments as this would have entailed hundreds of hours of additional searching to develop the required

dataset. We encourage scholars to consider their findings that investors reacted negatively to Black TMT member appointments in light of what we find related to Black CEOs. Second, our tests of our higher bar arguments are simplistic and we believe further study of how minority leaders may need to prove themselves in ways other leaders do not would offer important contributions to understanding how race affects strategic leaders. Our study also shares some limitations with the Gligor et al. study. Like their study, we use an event study methodology which is useful for examining short-term investor reactions but does not speak to the longer-term impact of CEO racial minority status. Our study, like Gligor et al.’s, also relies on the race perceptions of coders, which has limitations. We cannot be fully confident that the coders’ perceptions match those of investors. Moreover, Gligor et al.’s race coding scheme that we followed did not include multiracial categories. We describe above how we handled cases where we discovered information indicating CEOs had multiracial backgrounds, but we acknowledge that our approach, like Gligor et al.’s, is limited in capturing the complexity of CEO race and how investors might perceive the race of multiracial CEOs. Finally, both our study and Gligor et al. are based on publicly traded firms in the United States. Given the unique racial challenges present in this setting, our results may not be generalizable to other contexts.

Conclusion

In this article, we consider the study by Gligor et al. and provide a different set of empirical findings that are aligned with an alternative theoretical argument. Contrary to their reported results, we find that investors do not appear to be biased against newly appointed Black CEOs. Rather, we argue and show support for the idea that investors are favorably impressed by the exceptional qualities Black CEOs bring to their firms, especially when these CEOs are hired from outside the firm. However, this may be predicated, at least in part, by the systematic disadvantages Black leaders still face in ascending to corporate leadership. Put simply, our study suggests that

it is not enough for aspiring Black CEOs to be just as good as their White counterparts—they must be substantially better to make it to the helm of firms. Until this is addressed, the poor representation of Black leaders in firms, and the differential in market returns to their appointments, will likely continue.

ACKNOWLEDGEMENTS

The authors thank SMJ coeditor Sendil Ethiraj and two anonymous reviewers for their constructive and developmental feedback during the review process. The authors also thank John Busenbark and Sekou Bermiss for comments on earlier versions of this manuscript. Finally, the authors thank Naomi Zheng and Taylor Nicolich along with the many other research assistants from Stevens Institute of Technology and University of Georgia who helped us with data collection.

Notes:

1 – At time of submission in May 2022, the following Black leaders were serving as CEOs in the Fortune 500: Rozalind Brewer of Walgreens, Thasunda Brown Duckett of TIAA, Marvin Ellison of Lowes, and René Jones of M&T Bank (Wahba, 2021). Note that Kenneth Frazier, CEO of Merck, retired effective June 31, 2021.

2 – The terms and capitalization we use are consistent with APA guidelines for bias-free language (APA, 2020).

3 – For brevity, we refer to Gligor et al. (2021) as “Gligor et al.” throughout.

4 – Gligor et al. declined our requests to share the list of Black and matching White CEOs in their sample and to clarify the process and keywords used for their media search for turnover announcements. They also did not respond to a subsequent request for clarification about other aspects of their paper.

5 – While 96% agreement is well beyond typical standards for rater agreement, in a sample of more than 4,000 CEOs, this would represent roughly 160 disagreements. If a substantial number of these were judgment calls between Black and White, that level of disagreement could account for the difference in sample size reported here and by Gligor et al. However, only one of the disagreements in our sample involved a potentially Black CEO. The rest involved disagreements among White, South Asian, East Asian, and Hispanic/Latinx CEOs.

6 – We Winsorized our entire sample of CEOs at the 1st and 99th percentiles. In practice, for Black CEOs this trimmed the values of the four largest positive CARs but did not affect any of the most negative Black cases. Thus, our conclusions from the Winsorized data are quite conservative. Details on CARs and Winsorized values are included in the appendix.

Reprinted from the Strategic Management Journal with permission from John Wiley & Sons Ltd.

Band Aids Don’t Heal Bullet

Wounds: Black Employees Need Organizational Justice

by Brenda Carter

In today’s Corporate Social Responsibility (CSR) era, post-George Floyd, many companies have increased their pledges to provide resources and opportunities to the communities that they serve. Sunshine Anderson’s song, “HEARD IT ALL BEFORE,” comes to mind. In its truest nature, CSR is an organization's external focus on social justice issues that impact the ecosystem in which they operate.

BRENDA L. CARTER is a Business Psychologist and organizational justice expert who is completing her doctoral degree in Business Psychology at the Chicago School of Professional Psychology.

UUNDER CSR EFFORTS, organizations commit to no longer turning a blind eye to the injustices that pervade marginalized communities and organizations’ consumer base. It also forces organizations to acknowledge the ways in which they have contributed to these injustices through unfair and inequitable practices. Unfortunately, CSR efforts do not adequately address the internal needs of marginalized employees that work inside of the organizations. While many organizations leverage Diversity Equity, Inclusion, and Belonging (DEIB) to address internal inequities, there continues to be a substantial gap between the company’s stated values of inclusion and the perception of those values being lived up to by employees. According to a 2019 study conducted by Deloitte, 93% of respondents stated that their organization articulated inclusion as one of its values, while 78% felt their organizations lived up to those values.1 Ready for the shocker? Black employees don’t trust their organizations, this is also known as the trust deficit

according to a 2019 McKinsey study. According to the report, Black employees were 39% less likely than their white colleagues in the same company to believe that their company’s DE&I programs were effective. For many Black employees these sentiments are all too familiar as there is nothing new underneath the sun.

If narcissism was a place

If narcissism was a place it would be our places of employment. How dare Black employees not be content with vocational segregation, which manifests as an overrepresentation of Black employees in the frontline workforce? These roles often have no pathway for advancement, lack healthcare benefits, and pay low wages, according to a 2022 Race in the Workplace study conducted by McKinsey 2, critically impacting Black generational wealth. Another study conducted by McKinsey in 2021 illuminated that despite widespread corporate commitments, many private sector companies have successfully hired Black employees as a whole but in mostly frontline and entrylevel roles. Black representation in management level roles significantly dropped, and the number decreased even farther at the senior manager, VP, and SVP levels. We all know the rebuttals to these data points always get redirected back to the fault of Black employees with an ever-moving bar of achievement or what is also known as “prove it again” bias.

“I’m good Luv”

“I’m good Luv” has become the sentiment of many Black employees who take on the new opportunities provided by these organizations, only to have their talents undervalued and exploited. Studies indicate that although companies have been effective at hiring Black employees at the lower level, they are having a harder time advancing and retaining them. Black employees made up 12% of the entry-level roles in the private sector (roles such as account associates, software engineers, and paralegals), but had higher turnover rates than their white counterparts. The high turnover rates of Black employees were also present at almost all levels. The high turnover/turnover intention rates, low organizational trust, and low employee

satisfaction come as no surprise for Black employees, as numerous studies have proven that Black employees experience significant roadblocks toward upward mobility in the workplace due to their incongruence with the prototype of the predominantly white leadership model.

Studies have found that despite not explicitly endorsing prejudice, people still unconsciously evaluate minorities and females negatively as a result of not fitting the “gold standard” prototype (Hoyt & Simon, 2016). 3 This perceived prototype creates social order and social categorization, which triggers inter-group competition and discrimination from the in-group against the out-group (Khosrovani & Ward, 2011).4 It can also create an internalized white supremacy and racism intragroup (within the same group), as a result of social categorization. This is where the obstacles and roadblocks experienced by Black employees in the workplace start to become more apparent, although still covert. For example, Black employees are generally perceived as less effective leaders than white employees due to negative stereotypes that depict them as having traits that are contrary to traditional leadership characteristics (Rosette & Livingston, 2012).5 Such automatic characterizations of Black workers have had a significant and lasting impact on Black career mobility and growth. Directly impacting the racial wealth gap, these discriminatory practices lead to a lack of Black talent in management and leadership positions regardless of similar performance to white colleagues.

The deep clog effect

“Back, back, back it up, ah shoot” Ever wonder why there are few Black employees in the leadership pipeline? Consider what I like to call the deep clogged effect, where anything that goes through the drain becomes backed up and unable to pass through. All superficial acts to unclog a blocked drain do not work. Allow me to put this analogy into context. Blacks face harsher scrutiny and evaluation which leads to lower performance evaluations. An abundance of studies has found that Black employees are more likely to receive lower ratings

regardless of their actual performance and that social behavior characteristics more significantly impact the ratings of Black than white employees (aka you can’t do what they do). This, in turn, impacts promotion, which then subsequently impacts pay and raises. It is not a performance issue. Studies also show that Black workers receive lower pay raises despite receiving high or comparable performance scores and appraisals as their white counterparts (Khosrovani, & Ward, 2011).6 The devaluing of Black labor dates back to slavery, as the white labor force was seen as the cream of the crop and therefore more valuable than the Black enslaved. Subsequently, this provided justification for white workers to receive top wages as opposed to the free labor gained by Black workers. The devaluation of Black labor continued even after the enslaved were emancipated from slavery because the only jobs Black workers could obtain were subservient, low-wage labor roles. As more ethnicities began to migrate to America, those that had greater proximity to whiteness were included in the white demographic and were subsequently seen as deserving of power and economic and social status. Proximity to blackness was seen as inferior and devoid of value, which resulted in whiteness being considered the gold standard.

As Shock G once said, “All around the world it’s the same song”

Despite policy-level and legal efforts aimed to reduce the mistreatment of Black people, and other marginalized minorities, powerful belief systems remain embedded as whiteness continues to play an invisible role in business and social operations all around the world, resulting in whiteness being presumed to be generalizable to all, universal, and preferred. This covert approach to bias, and discrimination has allowed organizations to further marginalize different ethnicities and genders in their hiring, firing, and promotion practices under the guise of “not being a cultural fit.” The laws of cause and effect lead to high turnover rates as Black workers look for greener pastures that will not pose a high risk to their psychological safety and emotional wellbeing while receiving their just due for

their work input. Many of us find ourselves quoting Fantasia, “If you don’t want me then don’t talk to me” as we chuck up the deuces to employers with intolerable cultures who then later backpedal when discriminatory behaviors are dragged into the light by black Twitter. One would think that in the midst of all of the traditional employee satisfaction and retention efforts deployed by human resources, Black and brown employees would get to experience the benefits of these efforts. I mean, we are employees too, right?

Unblocking the Clog

So how can organizations repair the relationship with their Black talent? They have to move beyond the band aid over a bullet wound-style effort. CSR and DEIB efforts only scratch the surface of repairing deep-rooted inequities and injustices, which is why they aren’t seen as effective for Black employees. It’s been the equivalent of using Tussin and Ginger Ale to cure Covid. While it might help with some of the symptoms, it doesn’t address the virus and the internal issues. Instead, companies must transition their DEIB practices to Organizational Justice practices. Unlike CSR, organizational justice focuses on multilevel internal justice.

What is organizational justice? The foundational underpinnings of organizational justice hold that a person’s perception of fairness depends on the employee’s assessment of whether the organization is operating in a way that is fair, moral, and equitable to all. Employees (Black employees included even though we somehow get ignored) assess the perceived balance between what the employee has invested into the organization (inputs), what the organization has provided in return to the employee (outputs), and if those outputs are equally comparable to others. This relationship of inputs, outputs, and comparing to others then determines employee engagement, commitment, or ultimate decision to chuck up the deuces and leave the organization. Inequity in the workplace creates tension that eventually causes employees to seek to achieve equity or reduce the inequity depending on the

magnitude of inequity. These efforts often result in what I like to call the “allow me to reintroduce myself” moments where employees reevaluate their relationship with the organization and decide to either leave the organization, transfer out of a department, or practice absenteeism. These moments of reevaluation are often ignited by what Lee & Mitchell (2001) call shocks,7 where in-ignorable incidents happen that cause “image violations’’ for the employee. 8 These image violations cause employees to recognize the organization’s goals and values are no longer consistent and aligned with their own. The three primary dimensions of organizational justice help to realign organizational values with the values of its Black and other marginalized employee groups.

Let’s go deeper

There are three primary components of organizational justice: distributive justice, procedural justice, and interpersonal justice. Distributive justice deals with the allocation of economic benefits and resources in the form (but not limited to) equality, need, ownership, and merit (Elenbaas, and Mistry, 2021).9 Procedural justice is the perceived fairness of the processes that are used in an organization to determine the allocation of distributive outcomes (Williams, 1999).10 Interpersonal justice, also known as interactional justice, refers to the quality of interpersonal treatment and interaction between individuals, traditionally identified within the context of the manageremployee relationship but can include interactions among peers and colleagues (Cropanzano, Prehar, & Chen, 2002).11

Interpersonal justice is among one of the biggest pain points for Black employees at every level. It’s often the interpersonal/ interactional piece that has served as a sort of gatekeeper and point of contention for many of us that drive us to leave organizations. This is because perceptions of interpersonal justice influence and directly impact the perceptions of procedural fairness. Interpersonal justice asserts that fairness has an interpersonal component that encompasses being concerned with others’ well-being and dignity, therefore

playing a role in governing one’s actions in social conduct and interaction (Greenberg & Colquitt, 2013).12 This has often been a major opportunity area for many organizational managers and leaders of Black employees and ties back to how Black labor has traditionally been devalued. To build a culture of interpersonal justice within an organization, interpersonal sensitivity must be amplified in the form of what Bies (1998)13 identifies as including honesty, timely feedback, courtesy, and respect for rights. This also includes operating in acts of ethicality and moral conduct that include treating all (including rather than excluding marginalized employees) employees fairly according to the prevailing norms of decency. It is important for organizations to note that interpersonal justice extends beyond fair treatment based on outcomes, which is usually where most DEIB programs tend to stop short.

As previously mentioned, procedural justice addresses the fairness of the processes used to determine the allocation of distributive outcomes. Unfortunately, many Black and brown employees, do not get to experience the fair application of organizational procedures, as many studies have proven that we often receive lower performance ratings due to bias vs actual performance, harsher day-to-day managerial feedback, lower recognition for work, low development opportunities, and lower promotions to name a few. Studies have also found that our performance ratings are more likely to be based on social characteristics that are not standardly applied to other cohorts (i.e. the pervading angry Black woman myth that has been repeatedly debunked by data showing that Black women don’t express anger more than other cohorts male or female) rather than measuring actual job performance. Procedural justice anecdotally addresses these inequities by providing solutions that require adjustments to an organization’s procedural enactment. While tenets such as choice, decision control, voice, and process control are all part of procedural justice practice, procedural justice extends beyond this to include consistency of application, the accuracy of rating, suppression

of bias, correctability of decisions, representativeness of varying interest, and ethicality in the application of conduct (Leventhal, 1980).14 Procedural fairness by default impacts distributive outcomes. To date, Black and brown employees are on the lower end of receiving a fair distribution of resources such as wages, bonuses, and raises. It is time for organizations to give their Black employees the same chances at opportunities, success, and “failing forward” as they give to white colleagues. This also includes not taking advantage of our labor, therefore paying us our just due. Distributive justice addresses fairness in the allocation of resources based on employee inputs and outputs and how the allocation of certain groups compares against others that have similar inputs and outputs.

“Walk it out”

If organizations truly want to begin to “walk it like I talk it” rather than being all hype and no show, they have to understand that awareness is not enough. It feels extremely disingenuous when organizations leverage a racially incited tragedy (George Floyd) as a catalyst for change for every initiative but race in the workplace because it’s too touchy. For Black employees, it only confirms that once again others get to profit from our pain while our needs are lost by the wayside. Black talent has given birth to many of the innovations (oftentimes without acknowledgment) that have made this country the shining star that it is, regardless of how under and devalued light in which it held us. There isn’t an industry or arena in which we have not caused a significant impact. It is time for organizations to go beyond seeing the value in our dollars as a consumer group, and time to see the value we have always brought to the table that our ancestors helped make. Until organizations begin to stretch themselves beyond the band aid over the bullet wound efforts, they will continue to lose Black talent, which will continue to come back to bite them in the proverbial butt because as sister Beyonce once said, You won’t break my soul.”

Notes:

1 – https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-about-deloitteuncovering-talent-a-new-model-of-inclusion.pdf

2 – https://www.mckinsey.com/featured-insights/diversity-and-inclusion/race-in-the-workplace-the-frontlineexperience

3 – Hoyt, C. L., & Simon, S. (2016). The role of social dominance orientation and patriotism in the evaluation of racial minority and female leaders. Journal of Applied Social Psychology, 46(9), 518-528. doi:10.1111/ jasp.12380

4 – Khosrovani, M., & Ward, J. W. (2011). African Americans’ perceptions of access to workplace opportunities: A survey of employees in Houston, Texas. Journal of Cultural Diversity, 18(4), 134-141. Retrieved from https:// www.ncbi.nlm.nih.gov/pubmed/22288211

5 – Rosette, A. S., & Livingston, R. W. (2012). Failure is not an option for Black women: Effects of organizational performance on leaders with single versus dual-subordinate identities. Journal of Experimental Social Psychology, 48(5), 1162–1167.

6 – Khosrovani, M., & Ward, J. W. (2011). African Americans’ perceptions of access to workplace opportunities: A survey of employees in Houston, Texas. Journal of Cultural Diversity, 18(4), 134-141. Retrieved from https:// www.ncbi.nlm.nih.gov/pubmed/22288211

7 – Mitchell, T. R., & Lee, T. W. (2001). 5. The unfolding model of voluntary turnover and job embeddedness: Foundations for a comprehensive theory of attachment. Research in organizational behavior, 23, 189-246.

8 – Ibid.

9 – Elenbaas, L., & Mistry, R. S. (2021). Distributive justice in society and among peers: 8- to 14-year-olds’ views on economic stratification inform their decisions about access to opportunities. Developmental Psychology, 57(6), 951-961.

10 – Williams, S. (1999). The effects of distributive and procedural justice on performance. The Journal of Psychology, 133(2), 183-193.

11– Cropanzano, R., Prehar, C. A., & Chen, P. Y. (2002). Using social exchange theory to distinguish procedural from interactional justice. Group & Organization Management, 27(3), 324-351.

12 – Greenberg, J., & Colquitt, J. A. (2013). Handbook of organizational justice. Psychology Press.

13 – Bies, R. J. (2001). Interactional (in) justice: The sacred and the profane. Advances in Organizational Justice, 89118

14– Leventhal, G. S. (1980). What should be done with equity theory?. In Social exchange (pp. 27-55). Springer, Boston, MA.

It’s Time to Face the Flawless Leaders in Your Organization

by Aurelia D. Gardner

As a society, we have been conditioned to think that imperfection is not only a sign of weakness, but it is both undesirable and abnormal. To compensate, we instinctively, and often subconsciously, hide our personal shortcomings-- from others and ourselves.

AURELIA D. GARDNER is the founder and CEO of WIB Strategic Solutions, LLC - a Woman-Owned Small Business that offers professional services to include program management, Requirements Development & Management and Conscious Leadership Development.

WWHEN BEYONCÉ came out with her song, “Flawless,” it was a defining moment in pop culture. Whether or not you agree with me, it is now eight years later and people still point to this song as an anthem of self-empowerment and acceptance.1 Who can resist singing, “I woke up like this! Flawless!,” and not feel energized?

While I’m a big fan of Beyoncé (and this song in particular), I feel this message has been taken out of context. The problem is that the concept of flawlessness has itself been idolized to the point that self-acceptance has been transformed into self-elevation at all costs. We are conditioned to ignore our shortcomings while succeeding “by any means necessary”. Embracing our imperfections is important but we are simply not motivated to be self-aware nor make necessary life changes by a society that promotes flawlessness.

Such a flawless mentality is self-sabotaging in all areas in life. As business leaders, being flawless can prove detrimental to the very livelihood of the organization. Being able to examine your own behaviors and attitudes and adjust as necessary to maintain the

influence needed to keep the team focused on strategic goals is paramount to effective leadership. The world has changed, and leaders need the skills required to navigate this new landscape. People don’t leave companies, they leave bosses…and they are leaving in droves!! It’s time to take a good, honest look at your organization, prioritize the outstanding but still maybe “flawed” leaders and give them the tools they need to create cultures that people flock to, cultures that allow your employees to thrive. It is imperative that leaders acquire the skills needed to actionably receive and process feedback. If organizations are to successfully navigate this new horizon of employees choosing well-being over perceived stability, our leaders must look for nonproductive behavior patterns and have enough self-compassion to acknowledge that personal areas of self-development not only make them human but places them on the true path to flawlessness. Sustainable organizational transformation can happen, but only with deliberate intention from the organization, the individuals and a steadfast investment by both in cultivating the best version of the leadership team, one leader at a time.

The High Price of Perfect

In their study titled High-Impact Leadership Development, Bersin & Associates (2008) emphasized that leadership development in an organization results in:

■ A 67 percent increase in the ability of the organization’s members to work collaboratively;

■ A 73 percent increase in employee retention;

■ Becoming 84 percent more effective at raising the quality of the leadership “pipeline;” and,

■ A 66 percent improvement in the organization’s results.

But what happens when your leaders do not recognize, or worse yet, are penalized for recognizing areas for development?

Open your eyes and look around. There is a pandemic of business leaders at the top of their game, leading highly successful lives, who are secretly suffering from crippling levels of stress, depression, and other major health issues. 2 Research suggests that the rate of depression for business leaders is actually double the rate of the general population. 3

Why is this happening? Are business leaders and entrepreneurs more vulnerable because of the stresses of work and the traits that have helped them achieve success? Are they just more likely to be caught in a conflict between work and personal obligations, personal values versus company goals?

While we cannot be certain of all the factors behind this trend, what we do know is that years of social media conditioning and the constant pull of our mobile devices have left us disconnected from ourselves and others.4 Social media and the flawless mentality breeds unrealistic expectations and amplifies them. People, especially high-profile people, are feeling pressured to constantly perform for a broad audience-- and many have proven themselves to be good performers.

But the reality is that life is not a Facebook highlight reel. Too many highly successful folks are out there secretly feeling like failures because in real life they can’t really live up to the false, flawless narrative they have created for themselves.

A while back I met with an old friend of mine-- smart and successful by most standards. On the surface, she seems carefree and happy, the life of the party, but it is just an act. Without warning in the middle of our conversation she admitted to having suicidal thoughts. She then proceeded to tell me in vivid detail about her attempt to take her life. The thoughts and feelings that she described were dark, and I was unprepared for them. I remember feeling sick to my stomach... and angry. MY friend of all people was ready to give it all up. Why? For what?

The crux of the issue is that even when we have achieved success and accomplishment, many of us feel torn. We feel torn between our personal and professional lives, torn between who we are on the inside and who we project ourselves to be on the outside. As an organization, a question that we tend overlook the most is “how are our leaders showing up”? How does this flawless leadership mentality show up in the workplace? Are your leaders able to thrive and inspire during times of volatility and uncertainty? It’s hard to trust, empower, set boundaries, and demonstrate empathy when you are only judged by your latest success. How do leaders take the time to coach and mentor team members when the stakes are high and only one goal matters… get the job done!

Another huge problem with the popular version of flawlessness floating around these days is that it gives people permission to keep to the status quo and to ignore or resist meaningful feedback from loved ones and co-workers. Instead, we accept the inner discord as a mere fact of life. “Well, what can I do? This is just how it is.”

All of this apathy to our inner turmoil and the denial of our imperfections or shortcomings is one of the greatest roadblocks to creating healthy relationships-- with ourselves and with the people we lead.

Absent of such healthy relationships, we can’t possibly have a successful, fulfilling professional life. Absent of healthy relationships, like all great empires, businesses crumble.

From Flawless to Transformative Flawlessness in its most real and empowering form is having the self-awareness and courage to be yourself, to strive to be perfectly you. The instant we let go and stop trying to play a role that turns us into somebody we are not, we experience freedom. We are free to show our true colors, our unique inner power, experiences, talents, and abilities. This freedom is infectious within organizations!

When we can align this power with our personal and professional goals, with self-love and respect, free from fear and self-judgment - That is when magic happens, this is when transformation and true buy-in to company visions happens from the grassroots. We can then work to reach places we never thought were possible. We can clearly see the path ahead and have the space and awareness to truly connect to others, while bringing them along for the ride.

Instead of following the flawless leader lurking in the shadows preventing us from blossoming to our full potential, we can become transformative leaders. Our clarity, energy and passion can thus inspire positive change, growth, creativity, and ownership in those who follow us. This is the natural outcome of being real.

The 4 Pillars of Transformative Leadership

In short, transformative leadership requires being good at both relating to ourselves and others. To get to this place, we need to hone four critical qualities: Self-Awareness, Emotional Intelligence, Relatability, and Openness.

Though it may seem these are overlapping elements, there are some subtle, important differences to be aware of:

Self-Awareness and Personal Growth

The very first step to being ourselves and to living an authentic life that is consistent with our values and goals is the art of self-reflection. We need to have the courage to look our flawed self in the face: the good with the bad, the pretty with the ugly, the normal with the crazy. What are her fears, concerns, and anxieties? What motivates him? What is holding them back? The goal is to try to understand what that voice is telling us.

We can then begin the process of freeing ourselves from instinctual defensiveness and removing the unconscious masks we have been hiding behind. We will be empowered to make the changes needed to cultivate the business life and the relationships that inspire people to engage and excel.

Emotional Intelligence

Self-awareness is the foundation of emotional intelligence, which is the ability to recognize, understand and manage our own emotions and respond in a positive, constructive way to the emotions of others. Enhanced emotional intelligence allows us to discover and embrace our limitations and grow in response. As a leader, it then becomes easier to understand, empathize and embrace the limitations of those around us. We will also be better equipped to guide them on the right path, making them feel like included and valued members of the organization.

Plus, personal awareness and self-confidence are magnetic properties. When we are on a personal path of self-awareness and self-improvement, we become role models and a source of inspiration. Healthy organizations start with the best version of their people!

Relatability

While self-awareness is critical to being a successful business leader, it is only part of the equation. We must also be willing and able to connect to others. This is a two-way street that puts all of the above awareness into action. When we ask someone, “How are you doing?” We need to make an effort to listen to the response and ask some follow up questions.

We should communicate our values and beliefs and be tolerant of the beliefs of those around us. As we get in touch with our own intrinsic value, we need to remember the intrinsic value of others and show our appreciation. The more we appreciate people and their impact, the easier it becomes to relate to them.

One last point: we need to pick areas where we are willing to let our guard down, areas where we can express our weaknesses and flaws. Once we give ourselves permission to not be perfect, it will naturally be easier to open ourselves up to others and reveal some of the areas where we are still a work in progress. Showing vulnerability allows others to be vulnerable and just maybe feel comfortable asking for the help they need to start

solutioning in more creative, collaborative ways that positions the organization to meet the operational demands with gust rather than fear and turmoil.

Openness and Transparency

That brings us to the last quality: being genuine and honest with ourselves and others.

When we believe that we are flawless in an unhealthy way, we are simply not open to receiving feedback from others. Instead, we may go to great lengths to block out feedback and ignore signs that we may need to adjust our thoughts or behaviors.

However, when we try weaving some relatability and honesty in our conversations, those we are leading will know that they are not alone in trying to navigate this thing called life. Such openness on the part of leaders generally encourages openness in those who they lead. This can in turn bring about greater awareness and clarity all around. We also need others for feedback to set us straight and to see the things we cannot see ourselves.

Let’s face it, individual mindset and behaviors breed culture and culture is impactful to business success. With the right attitude, allowing your leaders the grace to acknowledge imperfections can become the seeds of self-acceptance, development, and growth throughout your entire organization. If you can remember this and pursue it, your organization will not only advance, it will blossom from within.

Notes:

1 – Kornhaber, S. c2014. The Atlantic [Internet]. Beyoncé’s ‘Flawless’: The Full Story. Available from: https://www.theatlantic.com/entertainment/archive/2014/06/the-full-story-of-beyoncesflawless/373480/

2 – Sahadi, J. c2018. CNN Business [Internet]. Depression in the C-suite. Available from: https://edition.cnn. com/2018/09/30/success/ceos-depression/index.html

3 – Pillay, S. c2019. Chief Executive [Internet]. When CEO Depression And Anxiety Trickle Down Into A Company. Available from: https://chiefexecutive.net/when-ceo-depression-and-anxiety-trickle-down-into-acompany/

4 – Amatenstein, S. c 2019. Psycom [Internet]. Not So Social Media: How Social Media Increases Loneliness. Available from: https://www.psycom.net/how-social-media-increases-loneliness/

Leaders Harmonize Fee Time, Free

Time, and

by Jeffery S. Perry

Me Time

Effective leaders are typically high-capacity people with high-capacity lives. The increased leadership demands of organizations and society are chronicled daily, along with the desire of leaders to have fulfilling personal lives.

JEFFERY S. PERRY is Founder & CEO of Lead Mandates LLC, an advisory firm that helps organizations improve business and leadership performance.

MMUCH HAS BEEN WRITTEN about the importance of work-life balance. However, work-life balance can imply that work is not a part of life, life does not require work, and community service is undervalued. Rather, here is a framework of three domains that effective leaders can harmonize across their lives:

■ Fee Time: when leaders are paid for their professional roles

■ Free Time: when leaders give back to the community through service and volunteerism

■ Me Time: when leaders engage with family and friends and make time for themselves

Is it possible for leaders to harmonize their lives across these dimensions? The answer is yes, but it requires selfconfidence and intention.

Each domain is important. Fee Time is foundational because it is related to professional lives or vocations, and results in compensation. Free Time benefits society at large when leaders lend their talents to organizations or causes about which they care. Many leaders seek to make the world a better place through community service. Me Time brings richness and fulfillment when leaders spend quality time with family and friends and carve out personal time as well. This may include vacations, family engagements and commitments, social time with friends, personal passions, and personal renewal.

While there may be a long list of specific approaches used by successful leaders, here are four over-arching approaches to harmonize across these domains of life:

1

Be Present: For leaders to have optimal satisfaction and outcomes in professional, service, or leisure domains, it is critical to be present in each without distractions. Simply put, effective leaders do what they are doing.

■ In Fee Time, this means being focused on tasks at hand and developing strategies for productive use of time. Countless management surveys suggest that 20% of the effort at work produces 80% of the results. Leaders who are skilled at focusing on what matters are ahead of the game.

■ In Free Time, this means being dialed into the needs of organizations and causes while engaged with them. The needs of society are great, and the skills and talents of leaders can make a positive difference. Whether it’s community service, mentoring, or some other area of need, being fully present drives desired impact.

■ In Me Time, this means being engaged with family and friends in meaningful ways. This goes beyond simply unplugging devices but plugging into the lives of people. This also means taking personal time for mental and physical health, overall well-being, and happiness.

Schedule Priorities: A common view is that leaders should prioritize schedules given the demands on their time. Unfortunately, simply prioritizing schedules is a reactionary approach. A more proactive and effective approach is to schedule priorities, making clear commitments and intentions across Fee Time, Free Time, and Me Time, even when these choices are difficult. A notable example of this approach is from former EY CEO Mark Weinberger. In a TIME article, Mark shared, “At any moment you are going to feel guilty about what you’re not doing, like today I’m missing the World Economic Forum in Europe to move my daughter into her dorm in USC.” By scheduling his priorities, Mark sent a powerful message to EY, the World Economic Forum, and his family.

Be Comfortable Saying No: Benjamin Franklin once said, “If you want something done, ask a busy person.” Therefore, it is not unusual for leaders to be asked to do many things, especially those related to Fee Time and Free Time. That said, the keyword in Franklin’s quote is “ask.” Effective leaders understand that it’s okay to say no, especially when this could lead to over-commitment or mismanaged expectations. Leaders gain respect from others by knowing when to say no. With this foundation, when they do say yes, people have confidence that they will follow through.

Seek Leverage and Lift: Fee Time, Free Time, and Me Time need not be in completely separate compartments in the lives of leaders. A powerful technique is to seek leverage and lift across the domains that can increase overall effectiveness and satisfaction in each. For example, leaders who devote part of their personal time to exercise and physical fitness can greatly impact their professional effectiveness. Leaders who have achieved professional success have a greater platform to make a difference in giving back to the community, increasing their ability to do what author Bob Buford coined, “moving from success to significance.” Furthermore, demonstrating passion

and leadership in community service can be a family affair and can model the importance of volunteerism for the next generation.

It is undeniable that leaders are challenged to harmonize the elements of Fee Time, Free Time, and Me Time, but it is possible. Webster defines harmonize as “to bring into consonance and accord.” Considering these approaches help leaders strike the right chord .

Examining the Impact of a Unique Early-Intervention Academic Program on 250 Inner-City Children

by Westina Matthews, PhD.

In 1988, Merrill Lynch promised 250 randomly selected, predominantly Black inner-city first graders -- the Class of 2000 -- in 10 cities across the United States (Atlanta, Boston, Chicago, Detroit, Houston, Los Angeles, Miami, New York City, Philadelphia, and Washington, D.C.) that if they graduated from high school and enrolled in college, the company would pay the entire cost of their higher education or technical training.

WESTINA MATTHEWS, PHD., retired from Merrill Lynch after 24 years with the title of managing director, reflecting broad experience in business development, education, community relations, philanthropy, and diversity.

TTHOSE WHO FINISHED high school and chose instead to enter full-time employment or the military, would receive a onetime stipend. Merrill Lynch partnered with the National Urban League (NUL) and 10 Urban League affiliates to administer the program, which was called ScholarshipBuilder.

Twelve years later – in the year 2000 – more than 90 percent of this special cohort graduated and 95 percent of that cohort reported planning to go on to college, trade schools or military service. In 2019, a small team of former Merrill Lynch employees joined with the National Urban League to begin a search for these students and determine the long-term impact of this program.

Background

Although ScholarshipBuilder was developed in the spirit of other tuition-guaranteed programs that have funded college costs for inner-city children, this program was unique in several important respects: children were identified in the first grade; the scope of 250 children in 10 cities; parent and teacher involvement; and the dedicated support provided by the National Urban League and 10 of its affiliates.

In the selection process, “random” meant different things in different cities. In Los Angeles, a pre-requisite was that students had participated in Head Start, and a computer was used to randomly identify the Scholars. In New York City, an intact first-grade class met the criteria and was selected. In Philadelphia, the names of all first-graders in one elementary school were put into a hat and 25 names were drawn during an assembly in the auditorium. Based on Dr. Ronald Edmonds’ classic research in “Effective Schools, for the Urban Poor” (Edmonds, 1979), the original intention was for one school to be selected in each city – but in Miami, Scholars were picked from eight schools.

In some cities, the Scholars were kept together in the same class through the third grade. In Boston, under a court order to desegregate, the Scholars were bussed to schools outside their own community. Elsewhere, by the time these students reached high school, several of the full-time coordinators had already located an office in the school to allow for ready access by the Scholars.

Supported by Merrill Lynch volunteers as well as parents, guardians, mentors, and school personnel, the Scholars were surrounded by a cocoon of encouragement and support –including tutoring, mentoring, emergency financial support for the family, and cultural enrichment – as they wound their way through elementary, middle and high schools.

Unanswered Questions

The lapse in tracking the ScholarshipBuilder students after the year 2000 left some important unanswered questions. Among them:

How many ScholarshipBuilder graduates actually made it through college?

What careers did they take up, and how successful were they?

What were their dreams, and did they achieve them?

How were their personal lives affected?

Where are they today, and how are they faring?

Are there long-term lessons that can be drawn, and do they offer tangible solutions for current and future generations?

Study Team

Five years ago, a small team of former Merrill Lynch employees – Dr. Westina Matthews, retired Managing Director, originator and chief architect of the program; Paul Critchlow, retired Vice Chairman and former President of the Merrill Lynch Foundation; and Richard Meier, original videographer for the ScholarshipBuilder program – joined with the National Urban League to begin a search for these students. The three principal researchers had been involved with the program itself since its very inception in 1988. Joining the team later was Thomas Milligan, former head of Merrill Lynch Employee Communications.

This follow-up study was entirely funded by generous personal donations, from former and current Merrill Lynch employees, Urban League participants, the students themselves and many interested individuals.

Sample

Unfortunately, due to damage sustained by Merrill Lynch World Headquarters during the terrorist attacks of Sept. 11, 2001, and the company’s subsequent acquisition by Bank of America, ScholarshipBuilder records were either destroyed or lost. With information gleaned with the help of the National Urban League and a Facebook page created by ScholarshipBuilder alums, Matthews and Meier traveled to eight of the 10 cities (Atlanta, Chicago, Detroit, Houston, Los Angeles, Miami, New York, and Washington, D.C.) and interviewed 65 students, parents, volunteers and staff. A total of 187 (including five deceased) members of the original cohort of 250 were located, either through direct contact with the Scholar or confirmation of their status from another Scholar, a parent or former Urban League/ Merrill Lynch participant.

In 2000, it was determined that 90% (225) of the ScholarshipBuilder cohort of 250 graduated from high school. Based on the survey as well as interviews, at least another 16 Scholars were identified as having graduated from high school or having earned a GED by 2000. This placed the overall graduation rate at 96% -- six percentage points higher than the original 90% as of 2000.

An online survey was completed by 83 of the Scholars. This represented 46% of the 182 located, surviving Scholars, a statistically significant representative sample.

Overview of Findings

Among the results:

In 2000, 90 percent graduated from high school (vs. an approximate 48 percent in the peer group).

88 percent of the graduating cohort entered some form of post-secondary education, vocational training or the military (vs. an estimated 55 percent among peers).

66 percent chose four-year colleges, 16 percent community/ two-year colleges and 6 percent vocational training.

84 percent of the graduating cohort completed some form of post-secondary education (vs. estimates ranging from 21 percent for urban graduates to 40 percent for all Black students graduating from high school).

34 percent earned bachelor’s degrees, 24 percent master’s degrees, 11 percent associate degrees, 2 percent doctorates, and 13 percent technical college or training.

At the time of the study, 93 percent were employed full-time.

Lessons Learned

Twenty years after this Class of 2000 Scholars graduated from high school, 15 lessons were identified as worthy of attention by those contemplating other early-intervention college prep programs for inner-city students. Perhaps the most important lesson was the power of persistence.

The traditional expectation for young people entering college is that they will graduate within four to six years. For many of the Scholars, it took longer. Life circumstances (e.g., illness, unplanned pregnancy, family obligations) interrupted their timetables but most persevered to eventually achieve degrees. Unquestionably, one of the transcendent achievements of ScholarshipBuilder was to plant the seed that, with persistence, they could do anything.

Conclusion

November 22, 2020 marked the 32nd anniversary of the launch of ScholarshipBuilder. On launch day in 1988, 250 inner-city first graders stood before family, friends, teachers and principals and in unison spoke this pledge: “Come the year 2000, I will graduate from high school and I will go to college."

To commemorate this anniversary, a virtual reunion was held for the Scholars, their families, and Merrill Lynch and Urban League staff and volunteers. Hosted by the ScholarshipBuilder Study and Reunion Project, the full report was released as well as a 30-minute documentary film, “A Chance to Win”2 (Meir, 2020).

The final report, “The ScholarshipBuilder Children of 1988: How They Fared, Examining the Impact of a Unique Early-Intervention Academic Program on 250 Inner-City Children”3 (Matthews and Critchlow, 2020) documents how the ScholarshipBuilder students fared; provides lessons learned for organizations contemplating such a program, and includes individual profiles of 27 of the students.

Brief profiles for 27 Scholars are included at the end of the report. You will meet: Shanita, who graduated from her Washington, D.C., high school a year early and was first of the Scholars to enter college; Niema of Philadelphia, an NAIA track and field championship sprinter who today is an author, educator, and meditation coach; Chantelle of Houston who is a teacher in the same elementary school she attended; and Joseph, an executive chef on the West Coast.

Also found were a firefighter, a barber, a champion bodybuilder, a rapper and a comedian as well as entrepreneurs, educators, health-care specialists, pharmacists, photographers, social workers, full-time mothers, and government employees, among so many other professions. Many are now parents themselves, deeply engaged in the education of their own children, and “paying it forward” in other ways in their own communities.

Edmund’s story begins two years after becoming a ScholarshipBuilder, when he witnessed his mother being killed, an innocent victim of gang violence. While in high school, his younger brother died of bone cancer and Edmund was diagnosed with Lupus. Although he barely earned a diploma, his participation in the ScholarshipBuilder program enabled him to attend a residential junior college. Slowed down by kidney failure and dialysis, it took him four years to complete the associate degree program. Ten years later, after working part-time and going to school part-time, he finally graduated from college (paid by Merrill Lynch), had a kidney transplant, got married, and earned his master’s degree in guidance counseling.

When asked what kept him going, he responded: “Because when I was in the first grade, I was told that I was a Scholar.”

ScholarshipBuilder is a program about much more than money. Thirty-two years after the initial launch, when asked what ScholarshipBuilder meant to them, many Scholars openly shed tears. Heard repeatedly was that ScholarshipBuilder created a family. This program provided for them not only an opportunity but a sense of confidence that, with the support of the ScholarshipBuilder family, they could overcome any personal circumstance to achieve their dreams.

Notes:

1 – Edmonds, R. (1979). ‘Effective Schools for the Urban Poor’, Educational Leadership, vol. 37, no. 1, pp.1518, 20-24.

2 – Meier, R. (Producer and Director). A Chance to Win (Documentary), ScholarshipBuilder Study and Reunion Project. Available from https://scholarshipbuildernow.org.

3 – Matthews, W. and Critchlow, P. (2020). The ScholarshipBuilder Children of 1988: How They Fared. The ScholarshipBuilder Study and Reunion Project. Available from https://scholarshipbuildernow.org.

The Privilege of Potential

by Olu Burrell, MSOD, PCC

“Olu is quite…social…during class.” “He is loquacious.” “He is incredibly smart and has so much…potential—if only he would apply himself…”

OLUTOSIN “OLU” BURRELL is President & C.E.O. of Olu Burrell Consulting. He is a multi-hyphenate Executive/Leadership Coach, People Strategy, D.E.I. Consultant, and Wisdom Sharer.

TTHAT’S HOW MOST of my report cards read from the mid-80s to the mid-90s when I was in school. I was one of those kids that loved the social aspect of school more than the educational aspect—at least at first. A consistent—if not persistent— sentiment from my teachers was that I was on the cusp of really making something of the whole school thing if only I deigned to focus more on the subject matter at hand than being in the middle of joke salvos being hurled about.

The potential that my teachers saw in me was, I would imagine, not unique to just those educators I encountered growing up in the nation’s capital, --but I presume it was fairly common everywhere.

Somewhere along the way of growing up and maturing, it is the hope that we grow out of the behavior that keeps us from realizing our potential and into the behavior that nurtures it and shows it far and wide—to step into that space that evaded us for years but now finds itself holding some sense of familiarity to us. If we’re lucky (read: blessed) we meet that potential at a crossroads that brings us forward into the destiny that knew we had much to learn before arriving.

The late, great Lorraine Hansberry once said, “That which makes you exceptional, if you are at all, is that which must also make you lonely.” Read that again.

These words ring so incredibly true especially as it pertains to the exceptionality that carries us into levels where we find ourselves as either “the only” or “the youngest.” It can cause us to feel unmoored. Or disconnected. But this does not have to be the case.

For many of us, the idea of leadership is akin to the solo journey of climbing a ladder. We know that ladders only allow one person to ascend at a time—but what if the path to leadership were atop a lattice instead? What is collaboration and cooperation were the tools by which we chose to ascend? What if the burden of (the perception of) sole exceptionality were tempered by the balm of collective community?

If that were the case then maybe we would see our ascension as a movement to which we belonged as opposed to a movement of which we made in a vacuum.

Many of us blow past “potential” in favor of “perfection”—for we learn at an early age that potential is something Black folks must exceed in order to obtain something approaching parity.

In my executive coaching work, I often engage with those to whom I share a racial and ethnic identity. Because of this, I find myself helping my clients navigate spaces in which the fatigue of being “on,”-- of consistently producing exceptional outcomes without always receiving recognition for doing so-has permeated their interactions so much that it has affected the way they see themselves and, by extension, the way they consider their perceived value.

Many of them have been in the unenviable position of training and guiding their future supervisors while left with the query of why—if they were capable enough to be entrusted with the task of training someone, why would they not be worthy of leading them as well?

Or when they find themselves engaging in sequences of semantics that find them at a loss in search of the actionable feedback they need to improve and to be equitably considered for positions for which they are clearly qualified.

In our quest for excellence and in our habit of exceeding, Black professionals often find themselves as an exception at the peaks of leadership in many professional contexts. Arriving at this summit is often hard-won; staying there remains harder still.

A few months ago, I was listening to HBR Ideacast, specifically episode #845, entitled, “DEI isn’t Enough; Companies Need Anti-Racist Leadership.” In that episode, James D. White, former CEO io Jamba Juice, was present with his coauthor and daughter Krista White to discuss their book, Anti-Racist Leadership: How to Transform Corporate Culture in a RaceConscious World. As a frequent consumer of podcasts and audio books, I have become comfortable with multi-tasking while listening. But at the very beginning of this podcast, I was arrested by a sentiment that I knew inherently and yet was still struck by the stark reality of how hard it was to hear spoken aloud. Mr. White, after taking a cue from the lead in from Ms. White, stated “I’ve never, across a long and successful career, been promoted on the basis of potential.”

As those words leapt from his lips into my ears, I found myself taking a pause ad reflecting. “Potential,” as I had known in my youth, was a catalyst that enabled my teachers to see me not as I was, but as I could be. It was their foresight of seeing me in the future with more polish, more wisdom, that caused them to not fear a future for me, so long as I learned to tap into it.

And here I was sitting in my office listening to a podcast that shifted me from passive listening to rapturous attention as I realized how the “benefit” to whatever doubts there were about me in my formative years has, in many ways, been laid at the feet of doubt whenever the subject of readiness and aptitude and competency became the subject of promotion and elevation. I realized also that this was not an isolated occurrence, but one that is felt in so many spaces by so many others whose visages were similarly kissed by the sun.

I began to then wonder how we may begin to regain and reclaim “potential” from the grasp of privilege in our quest for equitable treatment in professional settings.

I often find that whenever the answers escape me, I must put my faith in the questions, thusly treating the interrogative as the imperative.

As I thought about what it means to not only choose sponsors/ executive advocates who will speak our names in those spaces our feet have not yet touched, I thought about what it meant to equip them to insert “the benefit,” in the wake of “doubt.” I thought about what it means to make evidence-based support in the presence of evidence-less detraction no matter how seemingly benign it appeared. So, I asked:

“How might I want my sponsor to respond to seemingly innocuous questions like, ‘Are we sure they’re ready?’”

“How might I want my sponsor to “go to bat” for me in the face of statements like, ‘Don’t we think they need to be more visible across the enterprise before putting them in that seat?’”

“How might I want my sponsor to not only create a safe space for me but also curate a brave space for others to do the same for the persons for whom they are similarly charged to advocate?”

“How might we create a culture of positive peer pressure that makes potential possible for all? Because perfection is killing us.”

That last sentence was for you. When potential is placed out of reach then perfection becomes the salve we think we need. But that perfection, like hate, is too heavy a burden to bear. Give yourself permission to put down the weight of which you were not designed to carry in favor of piquing the potential you have within you. Reclaim your privilege and create the conditions for change by holding up a mirror and asking whether what’s being reflected holds true to your values. And if not, ask yourself what you might do differently.

Because as quiet as its kept, your potential is limitless.

About the Contributors

Olutosin “Olu” Burrell is President & C.E.O. of Olu Burrell Consulting. He is a multi-hyphenate Executive/Leadership Coach, People Strategy, D.E.I. Consultant, and Wisdom Sharer. His 20 years of experience includes working with individuals and teams in local and federal government, the not-for-profit and private sectors, as well as in K-12 and higher education.

Brenda L. Carter is a Business Psychologist and organizational justice expert who is finishing up her doctoral degree in Business Psychology at the Chicago School of Professional Psychology.

Aurelia D. Gardner is the founder and CEO of WIB Strategic Solutions, LLC - a Woman-Owned Small Business that offers professional services to include program management, Requirements Development & Management and Conscious Leadership Development. WIB Strategic Solutions was founded on the principle that helping companies improve their process and people-development competencies would enable them to realize mission-related solutions that actually contribute to organizational growth strategies. WIB offers competent and comprehensive solution delivery strategies based on more than 20 years of proven experience and industry best practices.

Seung-Hwan Jeong, Ph.D. is Assistant Professor at the University of Georgia Terry College of Business.

Westina Matthews, PhD. retired from Merrill Lynch after 24 years with the title of managing director, reflecting broad experience in business development, education, community relations, philanthropy, and diversity. Upon her retirement, Matthews was a fellow at the Weatherhead Center for International Affairs at Harvard University. She then joined the Jackie Robinson Foundation for four years as vice president, chief program officer. An author, public speaker, professor, and retreat leader, her latest book is This Band of Sisterhood (2019).

Ann Mooney, Ph.D. is Associate Professor at Stevens Institute of Technology School of Business.

Jeffery S. Perry is Founder & CEO of Lead Mandates LLC, an advisory firm that helps organizations improve business and leadership performance. He is a global strategic business advisor with relevant experience that spans 20-years combined as partner at Ernst & Young LLP (EY) and A.T. Kearney. He is a highly skilled and passionate leader in mergers and acquisitions (M&A), integrations, divestitures, and business transformations, linking strategy to purpose-led leadership and execution.

Timothy J. Quigley, Ph.D. is Associate Professor at the University of Georgia Terry College of Business.

Yangyang Zhang is Research Assistant at Stevens Institute of Technology School of Business.

A Research Journal for Black Professionals

The Executive Leadership Council

The Executive Leadership Council (ELC) is the preeminent membership organization committed to increasing the number of Black executives in C-suites, on corporate boards, and in global enterprises. Its mission is to increase the number of successful Black executives, domestically and internationally, by adding value to their development, leadership, and philanthropic endeavors, thereby strengthening their companies, organizations, and communities across the life cycle of their careers. Its purpose is to open channels of opportunity for the development of Black executives to positively impact business and its communities.