How inequality at Harvard Business School breeds inequality in corporate America

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How inequality at Harvard Business School breeds inequality in corporate America
Business Insider

How inequality at Harvard Business School breeds inequality in corporate America
Just 5% of Harvard Business School is Black. And it's been that way for 30 years, according to the dean.Rick Friedman/Corbis via Getty Images

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  • Black students comprise under 10% of students in MBA programs nationwide.
  • Harvard Business School, known as the number one broker of corporate power, shows even more dramatic statistics — its classes have been roughly 5% Black for at least three decades, according to HBS Dean Nitin Nohria.
  • Amid national protests following George Floyd's killing, Nohria said in an open letter that efforts to recruit Black students have been "painfully insufficient."
  • A lack of diversity in America's top business programs ultimately leads to a lack of diversity in America's top corporations, says Dr. Janet Ahn, an assistant professor at William Patterson University who studies leadership pipelines.

In 1978, The New York Times called Harvard Business School "the golden passport to life in the upper class."

Its churned out graduates like JP Morgan CEO Jamie Dimon, Facebook COO Sheryl Sandberg, and financial news bigwig Mike Bloomberg. Per the Financial Times, more Fortune 500 chief executives are minted at HBS than any other business school.

But there's something startling about those high-achieving grads.

For the last 30 years, just 5% have been Black.

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'Painfully insufficient'

In a June 7 open letter, HBS Dean Nitin Nohria said that there have been roughly 50 Black students per class for the last 30 years. He also wrote that the school has only tenured four Black professors in its "hundred-year-plus history."

"I apologize that we have not fought racism as effectively as we could have and have not served our Black community members better," he wrote, noting that their efforts have been "painfully insufficient."

The letter goes on to discuss steps the school will take toward racial justice, including developing an annual diversity objectives progress report, posting freely available race-related teaching and research materials on the school's website, and "identifying new ways of recruiting and retaining Black students, faculty, and staff." HBS will have a more detailed diversity and inclusion action plan before the start of the academic year, Nohria says.

Nohria, who was set to step down after ten years at the helm, stayed on to ride out coronavirus through December. In January, the school's African-American alumni association wrote to the university president asking that the next dean emphasize diversity and inclusion.

HBS did not respond to a request for comment from Business Insider.

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HBS doesn't look like America, but it does look like corporate America

Nohria's letter arrived amid weeks of Black Lives Matter protests. It also comes a year after Steve Rogers, one of the school's few Black professors, resigned due to a lack of representation across the faculty, student body, and leadership team at HBS.

At the time, Rogers noted that only nine of the school's 270 faculty members were Black. "There is an institutionalized racism at Harvard Business School that keeps Blacks out of almost every aspect of the school," Rogers told Poets and Quants. "It is virtually the same today as it was more than 30 years ago when I was a student." Today, just two of the school's 102 tenured faculty members are Black.

Dr. Janet Ahn, an assistant psychology professor who studies persistence and leadership pipelines at William Patterson University, told Business Insider that rates of attrition are higher for underrepresented communities.

Ahn said if the school is "only recruiting white males from rich backgrounds," then Black candidates will immediately "feel alien to the entire culture." She noted the lack of representation creates "a compounding negative experience" for Black candidates, ultimately contributing to a higher chance of the students who are accepted dropping out due to a missing sense of belonging.

She added that Harvard and other top institutions often cultivate a certain homogenous culture that tends to exclude minorities, which in turn impacts corporate America due to established leadership pipelines. In her consulting work, she said, she has seen Fortune 500 companies exclusively recruit from HBS and a couple other elite institutions. That hiring practice, she said, contributes to top companies resembling "a fraternity all over again — a boys club."

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As in: While Black people account for just over 13% of the American population, they only account for just over 3% of senior leadership roles in US businesses. There are only a handful of Black Fortune 500 CEOs.

Toward equity

The African American Student Union at HBS called on corporate leaders to work toward combatting boys-club cultures in their organizations in a June 19 open letter. "American business has been complicit in perpetuating and benefiting from racial inequities for centuries and thus, cannot stand idly by while injustice remains pervasive and rampant," the letter reads.

The letter goes on to suggest a list of actionable "guiding principles for equity," including thoughts on making diversity commitments at the C-suite level, growing the pipeline of Black talent, creating space for Black employees to be heard, collecting diversity data frequently, and conducting and publishing a pay-and-benefit equity study.

Such changes will foster the sense of belonging needed for a more diverse work culture, per Ahn, but she said companies may need to eschew places like Harvard altogether.

"Less than 1% of the population goes to these elite schools," she said. "Do companies know how much they're missing out on the 99%?"

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Some apparently are: Amazon and Goldman Sachs are among the companies rethinking just how much they want elite MBAs.

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