When researchers from the University of Georgia and Stevens Institute of Technology sat down to analyze thousands of CEO appointments from 2001 to 2020, they found something potentially surprising.
On average, firms appointing Black chief executives on average saw their market capitalization jump 3.1% within three days of the announcement, the researchers' recently published study found. In contrast, companies that appointed white CEOs saw their market cap decline by 0.91% over the same time frame.
The reason: Black CEOs are often more qualified than their white counterparts, and investors react positively to their "exceptional credentials," Seung-Hwan Jeong and Ann Mooney Murphy, two of the study's co-authors, tell CNBC Make It.
About 93% of Black CEOs in their study had advanced degrees, compared to 53% of white executives. On average, Black executives also had 1.6 more years of education than their white peers, and were more likely to have "elite degrees" from top universities.
While the market's positive reaction to their appointments is encouraging, it also points to a larger issue: Black executives often have to work significantly harder than their white colleagues to land the same CEO role.
"Our study sheds light on the need to level the playing field," Murphy says. "By the time that these Black CEOs have gotten to the highest levels, they've had to prove themselves time and time again."
Black Americans make up 13.6% of the country's population, according to the latest U.S. Census Bureau Data. But only 5.9% of all chief executives in the U.S. are Black, while 85.7% are white, according to 2021 data from the Bureau of Labor Statistics.
Only six Black CEOs sit at the helm of Fortune 500 companies this year, barely making up 1% of that group.
Murphy and Jeong say they hope their findings can "bump up the number" of Black CEOs, encouraging more boards and investors to feel less reluctant hiring them.
There's value in diverse leadership beyond a short-term stock bump, too.
"A lot of folks are looking to the leadership and who's reflected there in order to make a decision about whether or not they even want to stay, or aspire to be in leadership roles," Dria James, senior director of global diversity, equity and inclusion at Bain & Company, told CNBC Make It in April.
Notably, the study only examined short-term market reactions to appointment announcements. That means its findings don't reflect any newly appointed CEO's odds of long-term success in that role, or how the market could react beyond those first three days.
"The market may react to their appointments positively, but there may be some discrepancies when Black CEOs are engaging with their board or other stakeholders," Murphy says. "There still may be some bias and more challenges they face compared to white CEOs."