Positioning Your Chief Diversity Officer For Top Performance

What defines today's S&P 500 CDOs and what they need to succeed in their roles

Appointing a new diversity leader has long been one of the most visible and immediate options for companies to show their support for social justice. In the past year, we’ve witnessed surging demand for such executives, in light of a renewed emphasis on diversity, equity and inclusion. The good news is that we see clear signs that more companies are taking this mandate seriously. On the flip side, as market demand increases and the requirements of the role intensify, attracting and retaining successful diversity leaders has become an exceptional challenge.

Our recent analysis of the S&P 500 finds that the overall proportion of companies with a chief diversity officer has grown only slightly from 47% to 52% since our 2018 analysis, in part because turnover remains high.

• The average CDO tenure is now under two years, compared to more than three years in 2018.

• Nearly 60% of 2018 CDOs have left their roles, with the majority leaving the CDO track for other professional interests.

• Just 18% of current CDOs have prior experience in the role, down from 26% in 2018.

This combination of high turnover and tight supply of experienced chief diversity officers means many current CDOs are relatively new to the executive level, and to their companies. To learn more about how organizations can better transition new CDOs into their roles and position them for long-term success, we gathered perspectives from 11 experienced CDOs across industries in a recent roundtable discussion (see full list of participants on page 9).

Based on these conversations with CDOs, as well as our observations from the market, we have identified some of the top reasons for CDO burnout and five key actions that organizations can take to support new diversity, equity and inclusion leaders.

Key actions

• Clearly define the role

• Create regular touchpoints between the CEO and CDO

• Invest in a comprehensive DE&I infrastructure

• Build better onramps to support new and first-time CDOs

• Foster organization-wide receptivity and commitment to DE&I efforts

Snapshot of chief diversity officers in 2021

Just over half of large companies have a chief diversity officer, based on our recent analysis of the S&P 500. This is up only slightly from our last count in 2018, despite a sharp uptick in CDO appointments in the months following the George Floyd’s death in May 2020. High turnover in the role has contributed to the slow growth in CDO prevalence, as a number of S&P 500 organizations are currently looking to fill the position in light of recent departures.

Under pressure to fill these positions, many companies are turning to executives who have never held the role before. As our data shows, just a small percentage of current CDOs have been CDOs for previous organizations, with the majority being promoted up within an existing DE&I function or coming from another business or functional leadership role. The upside of internal lateral appointments is that the executives often already know the organizational culture well; the downside is that the DE&I expertise these executives bring may be limited.

Past experience in the role becomes a rarer commodity

• 26% of chief diversity officers have prior experience in the role (2018)

• 18% of chief diversity officers have prior experience in the role (2021)

• Source: Russell Reynolds Associates 2021 analysis of S&P 500 CDOs, N=262

Pathways to the CDO role are largely similar to those we observed in 2018. Looking at all significant past roles, HR remains a common starting point for many diversity leaders. A growing number of CDOs bring previous DE&I experience, consistent with the maturation of the field and the function. Fewer come from either a legal or communications background, in line with a general move away from viewing DE&I as either a compliance or a branding issue.

Why do CDOs leave?

Analyzing the current status of the 2018 class of S&P 500 CDOs, we found that 44% of those CDOs were still in their roles or with their organizations in a related capacity. The balance, 56%, had left the role, with the majority leaving the CDO role entirely.

In some cases, the CDO role has served as a pathway to other executive roles, with 4% of 2018 CDOs moving onto CHRO roles, several taking on chief sustainability officer roles, and several others becoming CEOs.

Nonetheless, the significantly shorter tenure of the CDO in comparison to other C-suite roles indicates notable retention challenges in this space. Some of the key drivers of burnout identified by our panel of experienced CDOs include:

Unrealistic and misaligned expectations pull the CDO in too many directions at once. With pressure from every angle to improve DE&I efforts, organizations may not rationally scope the CDO role.

“Organizations often hold very high expectations of what the CDO needs to do but in some cases sometimes fail to clearly define the scope and priorities for the role,” said Randall Tucker, chief inclusion officer at Mastercard. “After two or three years of dealing with constant crisis management and the pressure to show up as a master at everything, some CDOs may feel ill-equipped so they leave. The role has evolved into one that requires both a breadth and depth of leadership skills.”

Disconnect between DE&I mandates, organizational culture and business objectives erodes the sustainability of CDO efforts. Focused only on visible results and meeting diversity quotas, companies risk overlooking the long-term investments required to foster inclusive environments and leaders. Coupled with inadequate authority and lacking horizontal power, CDOs may feel increasingly frustrated by their inability to drive substantive and authentic institutional change.

“If people are trying to solve for a piece of the puzzle but not the whole puzzle, the credibility of CDOs will be at risk,” said James Fripp, chief equity & inclusion officer for Yum! Brands. For CDOs to be effective, “they need business acumen, knowledge, background and breadth of experience, not only depth.”

The very nature of the role lends itself to emotional fatigue. Focused on improving organizational welfare, CDOs risk overlooking their own needs as they address others’ challenges.

“People in the CDO role are givers, that’s our personality,” said John Iino, chief diversity officer for Reed Smith. “As a result, we tend to get overextended, only thinking about helping others and not taking the energy to focus on ourselves.”

Methodology

We analyzed the S&P 500 list as of February 1, 2021, drawing information from company websites, LinkedIn and other publicly available sources to determine the prevalence and backgrounds of senior diversity leaders.

Where 2018 S&P 500 CDOs are now

Recommendations for success

Against this backdrop, how should firms think about onboarding, supporting and retaining CDOs?
Our recommendations emphasize a holistic approach, from scoping the role to selecting the right candidate to creating a robust transition plan.

Clearly define the role. To avoid burnout, it is essential to scope the CDO role precisely and realistically. For example, many organizations are looking to fast track DE&I efforts by asking their new CDOs to stand up new systems, staffing and resources on a compressed timeline, in addition to addressing longstanding cultural challenges. When hiring a new CDO, clearly define which competencies are most essential for success – such as whether the organization needs a builder or a maintainer - and screen carefully for those.

The CDO’s mandate and priorities should be clearly connected to business issues and goals. “We often hear that a CDO should be a ‘champion of the D&I initiative,’ resulting in more of a cheerleader impression than a strategic business leader,” said Sally Saba, chief diversity officer for Medtronic. Instead, CDOs need to “be seen more as business strategists; true business partners and trusted leadership coaches. And D&I must be a business strategy, rather than a program or initiative.”

Reinforce regular touchpoints between the CEO and CDO to continually refine DE&I mandates based on evolving organizational needs. While the role is traditionally situated under CHROs, several CDOs have transitioned to direct or dotted reporting lines to the CEO. With clear CEO support and reinforcement, organizations have observed tangible progress and greater integration between DE&I mandates and the day-to-day work.

• What is the role of the CDO in the organization?

• Which leadership and experiential competencies are required for success within the current organizational context (e.g., entrepreneurial skills to build vs. maintain the function)?

• What business outcomes is the CDO expected to influence?

Allocate immediate and ongoing funding to build a comprehensive DE&I infrastructure and drive sustainable DE&I outcomes. Resourcing, reporting structures, governance models, and authority are crucial levers that enable the CDO to drive change and accountability. For CDOs who are standing up the DE&I function, it is important to consider the required resources to staff the team and support programs and initiatives that enable inclusive behaviors across the organization. By developing inclusive leaders and a comprehensive DE&I infrastructure, CDOs can be better positioned to serve as the leader of diversity champions.

• Which existing structures and systems serve the strategic goals around DE&I, and which ones need to be built?

• Where can the new operating model draw on internal resources, and where would external resources help speed progress?

• What are the immediate and ongoing investments required to support the mandates of the CDO?

• How will funding be allocated to the DE&I function?

Build better onramps to support new and first-time CDOs. A thoughtful transition plan is essential for any executive, and particularly for those who are new to leadership and entering in a high-stakes role. To increase the chances of success, make leadership development part of the onboarding for first-time CDOs and look for internal and external mentors who can provide ongoing support and knowledge transfer. Importantly, facilitating a smooth hand-off of responsibilities and realistic expectations will require clarity and transparency around stakeholder roles, timelines, and objectives.

• What transition and development plans are required to get the CDO up to speed on the organizational knowledge and leadership skills?

• What are the key milestones and timelines for the transition program?

• Which stakeholders and business leaders are best positioned to help the CDO navigate the organization?

Foster organization-wide receptivityandcommitment to DE&I efforts. Diversity is not a one-person job. It will be necessary for the entire leadership team to embrace the CDO’s mandate in order for it to be successful. As DE&I mandates get increasingly intertwined with ESG, the board can be an important and distinct source of help as well, both to the incoming CDO and to the leadership team as a whole.

Among the S&P 500 (2021), 74% of companies with diverse boards (at least 40% women) have CDOs. For companies with less than 40% women on boards, 50% have CDOs

• Are current leaders equipped with the knowledge and skills to support DE&I efforts led by the CDO?

• What is the role of the board in advancing DE&I outcomes?

Looking Ahead
While the appointment of CDOs often signal an organization’s commitment to DE&I, fostering sustainable outcomes require organizations to carefully evaluate and address the challenges perpetuating high turnover within the role. To better position CDOs for success, organizations must create the conditions conducive to organizational change and leadership accountability. Importantly, organizations must consider the resourcing and developmental attention that is required to support newer CDOs and build a function in an area that has been historically underinvested and overlooked.

AUTHORS
Zoe Chan is a member of Russell Reynolds Associates’ Leadership and Succession practice as well as its Diversity, Equity and Inclusion practice. She is based in Toronto.
Tina Shah Paikeday is head of Global Diversity, Equity and Inclusion Advisory Services at Russell Reynolds Associates. She is based in San Francisco.
Alix Stuart is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in Boston.

Partial list of roundtable participants

• Jyoti Chopra, Chief People, Inclusion & Sustainabilty Officer, MGM Resorts International

• Jorge Quezada, VP, Inclusive Diversity, Granite Construction

• James Fripp,* Chief Equity & Inclusion Officer, Yum! Brands

• Sally Saba,* Chief Diversity Officer, Medtronic

• Diana Cruz Solash, VP, Inclusion, Diversity & Equity, Vertex Pharmaceuticals

• Pamela Hardy, Head of Inclusion, Equity, and Diversity, Bose

• John Iino, Chief Diversity Officer, Reed Smith

• Randall Tucker,* Chief Inclusion Officer, Mastercard

*Featured speakers