Corporate Governance – How To Fix The C-suite Diversity Problem

Diversity, Equity, and Inclusion have been climbing the board and CEO agendas for decades. But while we’ve seen strong commitments and progress in entry-level roles across industries, we’re still a long way off from achieving true equity at the top. So, what’s holding leaders back? And how can organizations finally make progress for the good of the business, society, and global economies? To understand the state of C-suite diversity in America, and find ways to create truly representative leadership, we analyzed 1,583 executives at the 100 largest companies in the S&P500—what we call the S&P100.

The headline finding is that organizations still have a lot of work to do to ensure C-suite equity.

• C-suites in Corporate America are still disproportionately white and male. We see severe under-representation of women, Black, and Hispanic/Latino executives in most C-suite positions.

• Asian leaders experience a 25% representation decline from P&L leadership to the CEO role, whereas Whites experience a 10% increase from P&L leadership to the CEO role.

• The lack of equity at the top isn’t due to a pipeline problem. The US workforce is diverse. Yet a lack of equity in assessing, developing, and promoting talent is undermining representation at the C-suite level. 

• Addressing top team imbalances requires revolution, not evolution. Without concerted effort, diversity imbalances will continue and grow as underrepresented groups don’t see role models they can aspire to be.

C-suite equity is a distant goal

The American workforce is diverse, with 37% being Asian, Black, or Hispanic/Latino, and 47% being women. This creates a melting pot of skills, ideas, and experiences that helps organizations innovate and thrive. Yet that diversity isn’t flowing into executive leadership.

When we analyzed diversity within individual C-suite roles, we found a serious underrepresentation of Black, Hispanic/Latino, and women executives in the seats that wield the most power and influence on an organization. This includes the COO and CFO roles, as well as P&L leadership positions, which typically have greater exposure to the board and are often go-to targets in CEO succession plans.

Instead, we see underrepresented groups cluster in functional roles that usually aren’t steps on the road to CEO roles. For example, Black executives see the most representation in supply chain roles, while women only see proportionate representation in the CHRO seat. Hispanic/Latino executives fare worst overall, facing severe underrepresentation across every C-suite role.

The case for Asian leaders is particularly interesting and warrants further analysis. Although Asian leaders exceed their workforce benchmark representation in P&L leader roles (12%), this representation drops at the CEO level (9%). In contrast, white leaders’ representation continues to increase beyond workforce benchmarks of 78%, to 80% in P&L roles, and 88% in CEO roles. Part of the explanation for why Asian leaders may experience a drop in CEO is due to the narrow and limiting biases around ‘good leadership’, which ultimately hinders Asian leader progression.

Bias is holding back diversity Our analysis shows the lack of equity at the top of organizations isn’t due to a lack of diverse talent entering the workforce. It’s due to a lack of equity in assessing, developing, and promoting talent. It will take large-scale change, not just incremental improvement, to correct the C-suite diversity imbalance in Corporate America. And the consequences of inaction are far-ranging, with the potential to undermine long-term performance and competitiveness.

A lack of diverse role models who can inspire others creates recruitment and retention challenges. At the same time, bias in the assessment and development of underrepresented groups limits the progression opportunities for high-potential talent. With too few Black, Hispanic/Latino, and women leaders in the COO, CFO, and P&L leadership roles—which are often stepping stones to the CEO seat— succession pipelines become homogenous and less robust.

A lack of diverse leaders fuels board recycling rates—where the same people sit on multiple boards—which undermines business differentiation. While this is starting to decline as organizations increasingly look for board members with supply chain, marketing, and tech expertise, it will remain a problem until we see true representation at the top level. 

When we looked at the 95 S&P100 C-suites with more than seven executives, we found a considerable proportion lacked meaningful diversity.

• Paikeday, T.S. & Qosja, N. (2023), How To Fix The C-suite Diversity Problem,

A. Critically analyse the ethical implications of the persistent under-representation of women, Black, Hispanic/Latino and Asian leaders in C-suite positions, as described in the article. Explain relevant corporate governance concepts, evaluate how ethical leadership principles are applied or neglected and consider the consequences for organisational decision-making and accountability. (20)

B. Using evidence from the article, determine where corporate governance failures are contributing to inequity in C-suite representation. Critically assess the accountability of boards and executive leaders in promoting diversity, equity and inclusion and recommend improvements aligned with ethics, legislation and best practice. (20)

QUESTION 2   [60 MARKS]

Read the excerpt from the article provided and answer the questions that follow: 

Shaping the future of corporate governance 

Not long ago, I found myself in a boardroom conversation that had nothing to do with numbers, forecasts, or compliance checklists. Instead, the question on the table was a simple one: are we making decisions today that we would still be proud of tomorrow?

It was a reminder that, at its heart, governance is not just about rules but about judgement, accountability, and the responsibility we carry toward those who place their trust in us. It is against this backdrop that the launch of the King V Code marks an important milestone in the evolution of corporate governance in Southern Africa. More than an update to a well-established framework, King V invites organisations to pause, reflect, and recommit to ethical leadership, transparency, and sustainable value creation. 

At Capricorn Group, we view this moment not simply as a regulatory development, but as an opportunity to deepen our approach to governance, leadership and the services we provide to our stakeholders.

At its core, King V reflects a meaningful shift in how good governance is understood and practised. 

Drawing on decades of experience and lessons learnt, the Code refines governance into 13 principles that are intentionally clear and accessible, regardless of an organisation’s size or sector. Its outcomesbased approach centres on four pillars: ethical culture, sustainable performance, prudent control, and legitimacy. While these outcomes may appear aspirational, they are, in fact, practical and form the foundations of trust, resilience, and long-term confidence in a rapidly changing business environment.

One of the most powerful aspects of King V is its emphasis on integrated thinking. Boards and leaders are encouraged to view strategy, risk, resources, and stakeholder interests not as separate conversations, but as interconnected realities that must be considered together.

This way of thinking naturally flows into integrated reporting, which asks organisations to explain not only what value they create, but how they create, preserve, or, at times, erode it over time. At

Capricorn Group, integrated thinking is more than a reporting discipline; it sits at the heart of our approach to value creation and informs daily decision-making. It ensures that financial performance is considered alongside social impact, environmental responsibility, and the long-term well-being of the communities we serve.

King V also acknowledges an important truth about governance: that one size does not fit all.

By emphasising the principle of proportionality, the Code allows organisations the flexibility to apply its recommended practices in ways that reflect their unique context, complexity, and stage of maturity. This balance enables boards to innovate and respond to change while remaining anchored in sound governance principles.

King V has embraced the concept of double materiality. This means that organisations need to consider not only matters that affect financial performance but also the impact their activities have on the (rest of the) economy, society and the environment. This shift resonates strongly with Capricorn Group’s stakeholder-inclusive approach. We believe that long-term success depends on the health of the communities and ecosystems in which we operate. When we think about creating value in this way, it becomes a shared responsibility rather than just an outcome.

The Code also addresses the realities of digital transformation. It offers more guidance on technology, data governance, artificial intelligence, and new risks. King V encourages boards to lead innovation responsibly. The message is clear that we must balance opportunities with strong ethical oversight and prudent risk management.

Throughout King V, the role of the board remains central. Boards are entrusted with setting strategic direction, approving policy, overseeing execution, and ensuring accountability.

King V is more than just a code. It is a call to action that encourages boards and leaders to manage organisations ethically, consider all aspects of their work, and engage with stakeholders in an honest and thoughtful manner.

• Von Ludwiger, H. (2026). Shaping the future of corporate governance.

A. Critically analyse how the principles outlined in the King V Code can guide boards and executives in developing and implementing corporate governance policies. Evaluate the ethical considerations, integrated thinking and stakeholder responsibilities that underpin effective governance and discuss practical strategies for ensuring policies are applied appropriately across different organisational contexts. (30)

B. Using evidence from the article, critically assess how boards can monitor and evaluate the effectiveness of corporate governance practices. Identify potential gaps in current implementation strategies and recommend ethically grounded interventions that promote transparency, accountability and sustainable value creation in line with King V principles. (30)

Experts Answer on Above Questions on Corporate Governance

Ethical implication of C-suite under representation

The under representation of women and Asian leaders have raised significant issues in relation to fairness, equality and non-discrimination. The article clearly describes that the problem is not the lack of diverse talent but it is the inequality identified in respect to assessment, development and promotion.

From the point of view of corporate governance, it is the responsibility of the board to ensure fair leadership succession. The ethical leaders are required to challenge biases in promotion and provide equal access to influential roles. Diversity is extremely weakened from concentration of underrepresented leaders in roles that are less likely to lead to the CEO position.

Corporate governance failure and accountability

The lack of talent assessment, leadership development and succession planning is a clear indication of governance failure. It is the responsibility of the board to monitor representation in CFO and P&L leadership pipelines, setting measurable DEI objectives and requiring executives to report progression data. These measures would positively contribute towards diversity objectives with equality and anti-discrimination obligations, transparent governance rather than relying on voluntary commitments. The article clearly indicates that there is a need for large scale intervention and incremental changes are not sufficient.

King V and corporate governance policies

King V Can provide guidance to the board in establishing 13 principles, around four important outcomes such as ethical culture, sustainable performance, prudent control and legitimacy. It is important for the board to translate these principles into policies by taking into consideration the ethical conduct risk, accountability, stakeholder engagement and sustainable performance. It is important to apply an integrated thinking approach by considering strategy, risk, resources and stakeholder interest. The policies should also reflect proportionality thereby allowing the governance practises to merge with the organisation size, complexity and maturity. For ethical governance, it is important to consider environmental impacts in addition to the financial performance.

Monitoring governance effectiveness

The monitoring of the governance effectiveness can be performed through clear performance measures, risk oversight, integrated reporting, stakeholder feedback and regular policy reviews. It is the responsibility of the board as per King V for strategic direction, policy approval, execution oversight and accountability. The practical interventions that can be considered are board level governance reviews, independent assurance, stronger data in AI governance and transparent integrated reporting. With these measures it would be possible to measure ethical culture, transparency and sustainable value creation.

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