Washington, D.C., Oct. 8, 2024 – 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 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.*****