Misleading Diversity Research: Why We Must Look Beyond EBIT and Embrace TSR for Accurate Company Performance Assessment

Does diversity truly benefit business?

There are many ways to manipulate research findings to support a particular outcome, and it is not uncommon for correlations between diversity and company performance to be unclear. A McKinsey report claimed a strong link between diversity and earnings before interest and tax (EBIT) using a specific methodology. However, it is important to consider alternative performance measures such as total shareholder return (TSR), which reflects what investors actually receive from investing in a company. It is crucial to approach claims of diversity with critical thinking and carefully evaluate the evidence before accepting them without question.

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