Highlighting Data Connecting Diverse Corporate Boards of
Directors to Positive Results
e.l.f. Beauty (NYSE: ELF), in collaboration with North Carolina
Agricultural and Technical State University (N.C. A&T), today
released the “Not-So-White Paper,” a report underscoring the
impactful role that board diversity plays in the success of U.S.
publicly traded companies. This partnership is part of e.l.f.
Beauty’s Change the Board Game initiative, which is e.l.f.'s
long-term commitment to increasing diverse representation in the
boardroom by providing research, advocacy and tools to corporate
leaders.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241007779905/en/
e.l.f. Beauty and N.C. A&T release
“Not-So-White Paper” highlighting data connecting diverse corporate
Boards of Directors to positive results (Graphic: Business
Wire)
This ambition is based on the belief that e.l.f. Beauty’s own
success in delivering 22 consecutive quarters of net sales growth*
is in part drawn from its diverse board.
e.l.f. Beauty is the only publicly traded company in the U.S.
out of approximately 4,100 with a Board of Directors that is 78%
women and 44% diverse, reflecting the communities it serves.**
Making the best of beauty accessible to every eye, lip and face
has been the heart of e.l.f. Beauty’s mission since its founding 20
years ago. The company champions democratizing access across all
pillars of business, including the highest seats of power. e.l.f.
Beauty aims to close the gap between the board, C-suite and the
community.
Recognizing that expanding leadership voices requires the
partnership of other companies, e.l.f. Beauty’s goal is to help
double the rate at which women and people of color are added to the
boards of directors of U.S.-based, publicly traded companies by
2027, enabling businesses to benefit from a wide range of
perspectives and experiences.
N.C. A&T is the nation’s largest historically Black college
or university (HBCU). With an annual economic impact of $2.4
billion and external research funding of more than $102 million in
fiscal year 2024, the university continues to be a driving force
for social justice, economic growth and educational excellence. Its
Hairston College of Health and Human Sciences and Deese College of
Business and Economics contributed to this report.
“Over a decade of research from the commercial sector and
academia shows convincingly that diversity in the boardroom can
have several positive benefits for a company, including higher
return on equity, reduced financial risk, better returns for
shareholders and fewer lawsuits,” according to the report.
“However, these benefits are not automatic, and they are most
likely to occur when there are at least three members of
underrepresented communities on a Board of Directors. This should
make sense to board members from their lived experience, as one
voice can put an issue on the radar and a second voice can validate
it, but it often takes at least three to make a quorum that can
change policy.”
Key learnings include:
- Above average gender diversity on corporate boards of S&P
500 companies saw 15% return on equity and a 50% reduction in
earnings risk measured by EPS over one year.***
- Women on boards correlate to better price-to-earnings ratios.
****
- Boards with three or more women and/or minorities have a lower
likelihood of large-scale discrimination lawsuits.*****
“Today, more than ever, diversity is essential for strong
corporate governance,” said Tarang Amin, Chairman and CEO, e.l.f.
Beauty. “The research draws real-world correlations that diverse
boards are better equipped to navigate complex business
environments, foster innovation and deliver value to shareholders.
Our own intentional and ongoing journey led us to a Board of
Directors that is 78% women and 44% diverse. This stewardship gives
us the opportunity to be an agent of positive change.”
e.l.f. Beauty’s effort to “Change the Board Game” started
earlier this year with its purpose partner, OBERLAND, with an
informative campaign about the inequity that still exists on
corporate boards, which is misaligned with the U.S. population data
in the 2020 Census.
The findings of the “Not-So-White Paper” are being presented at
the National Association of Corporate Directors (NACD) meeting,
where ~1,500 executives and board members representing the largest
nationwide network of directors will be in attendance.
As part of this work, e.l.f. Beauty is sponsoring board
preparation training for 20 corporate director candidates through
the NACD Accelerate™ program and will be sponsoring a second cohort
with 20 director candidates in early 2025. e.l.f. Beauty is also a
sponsor of the NACD Center for Inclusive Governance (CFIG), which
is focused on creating diverse and inclusive boards that are ready
for today and the future through education and peer-to-peer
dialogue.
The “Not-So-White Paper” includes three unique sections:
- A review of existing studies yielding evidence that board
diversity – on both gender and racial/ethnic lines – positively
impacts performance and helps reduce financial and legal risk for
companies across sectors, and of varying sizes.
- The Change the Board Game Database was created and includes the
racial and gender representation of more than 4,000 U.S.-based,
publicly traded companies listed on the NYSE and NASDAQ.
- An initial analysis of the new data set was conducted, which
ranked boards by gender and racial/ethnic diversity, identified the
makeup of the “average board” in terms of representation, and
correlated increased diversity to improved performance.
“The findings underscore that a Board of Directors reflecting a
wide range of perspectives, experiences and backgrounds is a
critical factor for achieving competitive advantage and sustainable
growth,” said Elimelda Moige Ongeri, Ph.D., Hairston College Dean.
“More importantly, the goals of the Change the Board Game project
align well with N.C. A&T’s legacy of being at the forefront of
advancing social justice and equity. N.C. A&T is proud to
engage multidisciplinary researchers on this project, as this
provides a more comprehensive analysis and contextualizes the
data.”
The “Not-So-White Paper” is available to view at
www.elfbeauty.com/not-so-white-paper.
* As of June 30, 2024.
** Statistics based on e.l.f. board members and available data
as of 08/22/24 from FACTSET, includes publicly traded companies in
the XRT and XLP indices.
*** Bank of America Securities (March 4, 2021) Everybody Counts!
Diversity & Inclusion Primer
****Simionescu, L.N., Gherghina, S.C., Tawil, H. et al. (2021)
Does Board Gender Diversity Affect Firm Performance? Empirical
evidence from Standard & Poor’s 500 Information Technology
Sector
***** Abebe, M., & Dadanlar, H. (2021) From tokens to key
players: The influence of board gender and ethnic diversity on
corporate discrimination lawsuits. Human Relations, 74(4),
527-555.
About e.l.f. Beauty
e.l.f. Beauty (NYSE: ELF) is fueled by a belief that anything is
e.l.f.ing possible. e.l.f. is a different kind of company that
disrupts norms, shapes culture and connects communities, through
positivity, inclusivity and accessibility. The mission is clear: to
make the best of beauty accessible to every eye, lip and face.
e.l.f. Beauty and its brands, e.l.f. Cosmetics, e.l.f. SKIN, Keys
Soulcare, Well People and NATURIUM, are led by purpose, driven by
results and elevated by superpowers. e.l.f. Beauty is cruelty free,
with double certifications from both Leaping Bunny and PETA, offers
clean and vegan products and proudly stands as the first beauty
company with Fair Trade Certified™ facilities. With a kind heart at
the center of e.l.f.’s ethos, the company donates 2% of net profits
to organizations that make positive impacts. Learn more at
www.elfbeauty.com
About North Carolina Agricultural and Technical State
University
North Carolina Agricultural and Technical State University is
the nation’s largest historically Black university, as well one of
the top 25 “Most Innovative” universities in America (U.S. News
& World Report, Best Colleges 2024). North Carolina A&T is
a land-grant, doctoral research university and a constituent member
of the University of North Carolina System. A research intensive
doctoral institution, NC A&T is widely recognized for its
leadership in producing graduates in critical workforce areas.
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Media Contacts: Melinda Fried mfried@elfbeauty.com
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