How to make tomorrow’s leaders as diverse as their teams

Rapid demographic change is a given today. The question isn’t just whether leadership can keep up — but whether it will truly reflect the people it leads. Walk into any office and you’ll see a workforce made up of people from all backgrounds — genders, ages, walks of life, ethnicities originating all around Asia and Africa.

Yet at the top, the picture is different. Most CEOs of ASX 200 companies are still white people. Despite Australia’s multicultural population, 58% Anglo‑Celtic, 21% non‑European, and three percent indigenous — only five percent of senior leaders come from non‑European or indigenous backgrounds, according to a 2023 Diversity Council Australia report. Data from the Workplace Gender Equality Agency shows women hold only about 19% of CEO positions, 32.5% of key management slots, and a mere 33% of board seats.

In New Zealand, women constitute just 29% of leadership roles at top companies, even though they make up over half the workforce. The public service is leading a push for every leader to demonstrate inclusive leadership capabilities and cultural fluency through tailored training programmes, including Māori‑centred mentorships and employee networks, but deeply entrenched norms still perpetuate inequality: only a few percent of employees are aware of DEI training for leaders, and are unsure if senior management is held accountable.

All these point to entrenched bias, structural barriers and missed opportunity. A raft of psychological, historical and cultural biases still sidelines diverse talent at senior levels, rooted in everything from ‘mini‑me’ hiring to unconscious prejudice. 

Why diverse leadership is so important

More than a badge of fairness, leadership diversity fuels innovation, productivity and financial growth. A McKinsey study found companies in the top quartile for ethnic diversity were 33% more likely to outperform their peers, especially in terms of profitability. A Boston Consulting Group report pointed out that firms with diverse leadership generated 19% more innovation revenue.

In New Zealand, studies show that elevating Māori and Pacific representation correlates with better cultural outcomes and improved business resilience tempered by bicultural partnerships. Grant Thornton’s research highlights that when firms began mandating diverse candidate shortlists, female leadership rose from 17% to 30% within four years.

Similarly, the Gender Equity Insights series in Australia confirms that equal female presence on boards correlates with a 6.3 percentage-point reduction in the gender pay gap. Diverse leadership is not about optics, it’s about building competitive, culturally attuned, resilient organisations. Yet many organisations remain slow to adapt, with gender parity unlikely for decades unless they go beyond token policies.

What works to open up the C-suite

Shifting leadership diversity from aspiration to reality requires intentional intervention. One proven measure is mandating diverse shortlists. In New Zealand, adding this rule increased female leadership representation by 13 percentage points in half a decade. Similarly, when Australian organisations normalise flexible working, they not only support diverse talent but significantly reduce gender pay gaps and retention issues. 

Mentorship emerges repeatedly as a critical lever. Deloitte’s interviews with 15 female CFOs show that career-advancing support from both male and female mentors, as well as executive sponsors, helped these women navigate setbacks, expand their skills, and self-advocate within leadership structures. In spectrums beyond gender, culturally diverse female leadership can break through bias when equipped with cross-cultural mentorship and inclusive decision-making frameworks. 

Public sector efforts in New Zealand reinforce this principle through employee-led networks that amplify disadvantaged voices. Such networks, supported by executive sponsors, cultivate visibility and cultural safety, key drivers for elevating diverse talent to leadership roles.

Education is another major factor. The University of Melbourne has embedded DEI and ethics into its executive development courses, prompting organisations to reconsider hidden bias, inclusive leadership, and empathy in decision-making. Empathy is a particularly noticeable area for improvement, as a study in Australia exposed an ‘empathy gap’: 85% of managers believe they exhibit empathy, but only 46% of employees agree. Leadership must model authenticity, listening and emotional intelligence, not just diversity policies, to cultivate belonging.

True leadership diversity requires more than representation, it demands a pipeline to ensure continuity over subsequent generations of leaders. Deloitte and Grant Thornton studies show that high-performing diverse leaders benefit from informal and formal rotational programmes, lateral moves and leadership readiness training. Rotational exposure across functions increases visibility and leadership readiness, while flexible working and targeted development can convert early-career diversity into senior representation.

Diversity is a collective responsibility

Achieving diverse leadership demands coordinated effort across business, government, and community. Organisations must embed inclusion in everyday processes: recruitment filters, performance reviews, promotion policies and cultural assessments. Outcomes must be made transparent, to ensure that policy is transformative and not just performative.

Businesses must partner with diversity bodies to build inclusive cultures where difference is valued. Meanwhile, governments can incentivise corporate progress through grants or recognition programmes for firms that deliver tangible equity improvements .

Making sure tomorrow’s leaders reflect the people they lead isn’t just about fairness — it’s a smart move for business, and essential for future success.