7 Top Stocks to Watch With Diverse Leadership

Mark Reeth

These companies stand out as leaders in diversity.

Publicly traded companies are beginning to realize that diversity among its leadership isn't just admirable, but it's also profitable. Different points of view provide a company with a broader perspective when thinking about new products or attracting a new audience. That in turn can translate to improvements in sales and profits. While media attention has recently put a spotlight on diversity at the highest levels of the workplace, there are several companies that have emphasized diversity among their board members and in their C-suites for a while now -- and while correlation isn't causation, it shouldn't come as a surprise that many of these companies have enjoyed great success over the last few years. Here are seven top stocks with diverse leadership that every investor should be watching.

Hewlett-Packard (ticker: HPQ)

Hewlett-Packard has been at the forefront of diversity efforts for years now. Its board of directors is one of the most (if not the single most) diverse board in the tech industry. Of its 12 board members, five are women and seven are minorities -- three of whom, the company notes, are underrepresented minorities. HP also sets the standard just outside of the boardroom, with women representing 31% of employees at the director level or above. That's well up from 21.7% in 2015, when the company split from Hewlett Packard Enterprise (HPE). HP remains committed to improving its diversity efforts, as illustrated by the fact that 63% of U.S. hires in 2019 were from underrepresented groups, and the company plans to double the number of African American executives at the company by 2025.

Starbucks (SBUX)

While many think of diversity along the lines of race and gender, Starbucks has also made it a point to bring aboard directors of all ages -- the result is a board that has grown impressively diverse. In 2011, the company brought aboard Clara Shih, CEO of Hearsay Systems. Shih was born in Hong Kong, and when she joined the board, she was only 29 years old. In 2017, the board added Jorgen Vig Knudstorp, born in Denmark; Satya Nadella, an Indian-American man; and Rosalind Brewer, an African-American woman. Starbucks' 13 board members come from a broad range of backgrounds, which may help to explain how the company continues to maintain its global dominance.

Twitter (TWTR)

Until earlier this year, Twitter's board of directors only included nine people. Of those nine members, three were women, two were minorities and seven were independent of the company entirely (which may not speak to gender or racial diversity but at the very least provides the company with a diversity of opinions). Then, in March, the company struck a deal with activist shareholder Elliott Management that allows CEO Jack Dorsey to remain in charge and, in exchange, Twitter added two new members to the board and a third independent member will be selected. Though the two new members (one from Elliott and one from private equity firm Silver Lake) don't add much in the way of diversity, an already-diverse board has kept the company at the forefront of the tech industry.

Stitch Fix (SFIX)

When founder Katrina Lake took Stitch Fix public at the age of 34, she was the youngest woman in tech ever to do so. Today, she remains the company's CEO and chairwoman of the board -- a board that includes four other women among its eight total members, each of whom brings a diverse range of professional experiences to the table. At 37 years old, Lake is one of the youngest CEOs of a publicly traded company in the world, and the company itself is still young. Stitch Fix went public in November 2017, and as such, it's still working out how to become profitable. Yet a unique business model that enables customers to shop for clothes from home may be exactly what the world needs in light of a global pandemic that has kept everyone locked indoors.

GM (GM)

According to a report last year by executive search firm Spencer Stuart, 26% of the directors on the boards of all S&P 500 companies were women -- an impressive increase from 16% back in 2009. GM beat the average when two of its 13 board members retired in June last year, leaving the company with 11 directors. Of those directors, six are women, including CEO and chairwoman Mary Barra. GM remains one of very few public companies with a female-majority board, but the company has consistently illustrated its dedication to gender equality at every level from the boardroom down. As a matter of fact, a gender pay gap of less than 3% is just one of the reasons it was named a global leader in gender equality in the workplace.

Marriott International (MAR)

Marriott International is one of the largest and oldest hoteliers in the world, but don't make the mistake of thinking that a long history would leave this company stuck in the past. Of the 12 members on its board of directors, four are women and two are African Americans, but it's outside of the boardroom that the company's diversity efforts really begin to shine. Fifty-four percent of the company's workforce are women, and 40% of the positions of vice president and above are held by women. Marriott also has a long-stated goal of reaching gender parity in all leadership roles by 2025. With so many companies only just now announcing the efforts they'll take to create a more diverse work environment, it's refreshing to find one that has been putting its money where its mouth is for years.

Mastercard (MA)

Mastercard operates one of the world's largest payment systems, with a footprint in more than 200 countries. Given the diversity of its markets, it should come as no surprise that the company's board of directors is impressively diverse as well. Of the 14 directors on its board, more than half are minorities; this includes current CEO Ajaypal Banga, an American Sikh who will step down as CEO but remain on the board as chairman beginning in 2021. E-commerce has dramatically shifted the payments landscape, and the growing popularity of digital payments around the world means that the changes will only continue. With a diverse group of leaders at the helm providing the company with a variety of perspectives, Mastercard should be able to keep up with the times.

Seven stocks to watch with diverse leadership:

-- Hewlett-Packard (HPQ)

-- Starbucks (SBUX)

-- Twitter (TWTR)

-- Stitch Fix (SFIX)

-- GM (GM)

-- Marriott International (MAR)

-- Mastercard (MA)


Mark Reeth is a contributing writer for U.S. News & World Report, where he writes about anything and everything to do with investing. Prior to U.S. News, Mark covered consumer goods, technology, and telecom stocks for The Motley Fool. When he's not writing about investment strategies Mark is busy running his own small business, which has given him a better appreciation of the personal finance trials and tribulations of entrepreneurs everywhere.

Mark is a graduate of the College of the Holy Cross, where he studied History and Education. You can connect with Mark via LinkedIn, or follow him on Twitter.