• Thu. Feb 29th, 2024

Diversity and Company Performance: Examining the Link Through Critical Thinking and Objective Evaluation


Feb 11, 2024
Does diversity truly benefit business?

A McKinsey report claimed a strong link between diversity and earnings before interest and tax (EBIT) using a specific methodology. However, it is important to note that correlations between company performance and diversity are not always clear-cut.

Instead of focusing solely on EBIT, a more natural performance measure is total shareholder return (TSR), which reflects what investors actually receive when they invest in a company. It is crucial to approach claims of diversity with critical thinking and to evaluate the evidence objectively before making any conclusions.

Moreover, it is essential to avoid blindly accepting claims of diversity without thoroughly examining the evidence. While there may be some correlation between diversity and company performance, it is important to consider other factors that may impact these outcomes. Therefore, it is important to have a holistic view of the situation before jumping to any conclusions.

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