According to the Center for Talent Innovation, few minorities hold executive positions at Fortune 500 companies due to a lack of sponsorship.
A new report by the Center for Talent Innovation (CTI), published in October 2012, found that minorities hold less than 13 percent of board seats at Fortune 500 companies. According to the report, Sponsor Effect: Multicultural Talent, "People of color wield a total $2.5 trillion in buying power, yet their representatives at the top of the economy could fit in a corporate jet."
Why do no more than a handful of minorities hold C-level positions in some of the nation's most high-powered companies? The reason, the report reveals, is lack of sponsorship. Sponsorship—"powerful links to senior executives [who are] willing to put their reputation on the line to promote their protégés all the way to the top"—is a powerful driver of ambition and engagement, yet it eludes up to 95 percent of minority professionals. Despite the evidence that minorities are more career ambitious than whites, only 5 percent have sponsors compared with 21 percent of whites.
Not to be confused with mentorship, a more low-profile form of support, sponsorship is "visible, high-octane support" that can compound an individual's dedication to her job and unlock her ability to perform. "If you aren't being sponsored, you're not getting the next opportunities," says Kerrie Peraino, chief diversity officer at American Express.
Companies should not underestimate the power of sponsorship to retain critical multicultural talent. Minorities without sponsorship are significantly less content in their careers and 40 percent more likely to leave a new job within a year.
Minorities with sponsors, on the other hand, are more likely to ask for pay raises and stretch assignments. "Sponsorship makes you want to give back," says Rosa Ramos-Kwok of Morgan Stanley. "Just knowing that you have someone in your corner who believes in you makes you more efficient and productive at what you do."
CTI's report builds a strong business case for multicultural sponsorship, a case that relies mostly on engagement and retention, but also on the increased networking, market, and client opportunities such diversification can yield. According to the study, more than 75 percent of senior executives acknowledge the need to develop global business strategies (including global leadership capability programs), yet only 7 percent are satisfied with their organizations' current efforts. Literally changing the face of corporate leadership through diversification not only allows organizations to tap into new talent, but also provides more opportunities for global reach.