Are Companies Handling the Chief Diversity Officer Role All Wrong? – WWD

Less than three years ago, many companies were blissfully unbothered by the racial makeup of their staff, DE&I was not yet an acronym in the lexicon and most had never heard of a chief diversity officer.

Fast forward to a murder in the spring of 2020, an ensuing racial reckoning, black squares that did little more than expose what companies were really lacking in the diversity department, and now chief diversity officer roles are being created faster than most companies know what to do with them.

As such, while some appointed to the role have toiled to make change at organizations that are truly making space for it, others have already exited the roles they entered since late 2020 when most of these opportunities manifested.

In that time, racial representation at companies that made commitments to improve it has, more often than not, ticked up little more than at a snail’s pace. And in many cases, it has a lot to do with how companies are incorporating the chief diversity officer’s role or rather, how many of them really aren’t.

The issue of embedding

“The remit and the role of the chief diversity officer, where they sit, to whom they report, what are the budgets they have, what are the resources they have, what are the profiles that they have, I always find it as a very good indication of the DE&I agenda of an organization,” said Aniela Unguresan, founder and chief executive officer of Edge Empower, a platform built to help companies and investors deliver on a DE&I agenda.

The company, which counts L’Oréal USA, Deloitte and UNICEF among its clients, provides organizations with a software tool to aid them in measuring, accelerating and getting certified on where they stand in gender and intersectional equity in the workplace.

What she’s seen in the last couple of years, she said, amounts to companies having “a sudden desire to do something” without a clear agenda and understanding of its own internal problems, yet they often want a singular employee to solve them. Sometimes without many — or any — resources, including budget and staff, and sometimes without any real rank or power in the organization.

“More often than not there is an expectation that that person will take on the role, will solve all the problems and will just come back in telling them, ‘It’s done,’” said Unguresan, an economist by trade and a leader in the ESG space. “I think that there has been, in the past, this pattern of this expectation behind the role.

“And if you think of it, even in the name, do you know of any other title in an organization that has chief in it who is not part of the top leadership team and who does not report directly into the CEO? I don’t know of any other one but this one, who very rarely reports into the CEO, and even when they report into the CEO, they are not of the top leadership team,” she added.

It does beg pause when considering companies are making promises left and right (albeit things have certainly quieted on this topic in the last year) about doing this and that to improve diversity, equity and inclusion, that many have singled it out as the only chief with less voice and clout than their counterpart chiefs.

Unsurprisingly, with Edge Empower, Unguresan has encountered many a chief diversity officer bearing this undue and unbalanced burden.

“I was talking with a chief diversity officer of one of our clients, which is a large publicly listed company, and she was telling me, ‘When we look at the numbers, for example, our diversity numbers year-over-year, everybody turns to me and says, ‘Well, the numbers are not improving as fast as we would like.’ And then I look back to them and I say, ‘But am I the one making the hiring decisions? Am I the one making the promotion decisions? Am I the one reinforcing our retention policy?’” Unguresan recounted.

Companies really need to think about, she continued, “the way in which we define the scope of the role, in the way in which we give the resources, the reporting line, the preeminence of the role and in the way in which we assign the responsibility of the role, which is not at all [for the chief diversity officer] to bear the accountability for the diversity, equity and inclusion of the organization — this is everybody’s job in the organization — but rather as a person who orchestrates the performance of the organization around this topic.”

The inside view

Renée Tirado is one DE&I leader who understands how things with this role can go. She resigned her post as Gucci’s global head of diversity, equity and inclusion in July 2020 after one year, opting to go another path with her own VegaRobles Consulting LLC focused on DE&I.

“The decision was largely personal. What happened with George Floyd was personally very, very disruptive to what I thought about this work. I just lost a lot of faith and energy around it. Having been in the space already at that point over 10 years and having the same conversation for 10 years, and then this happens, I had a crisis, a professional crisis of whether or not this was really making an impact. The majority of my decision to remove myself and to leave Gucci was driven by that,” she told WWD.

“I think from a pure people perspective, they [Gucci] have some key people in the organization that are actually legit champions around [DE&I] and would like to just do well. Alessandro [Michele, Gucci creative director] was a resource and ally as we did things like a design fellowship program in Milan. There are people there that want this and believe in this, but just need the expertise to kind of drive it,” she continued. “I wasn’t the right person for that role at that time and at that phase in my career, so better to get out of the way to allow them to find things and go the direction that they want to go in.”

What many companies are still missing, she said — noting, “I am not speaking on behalf of Gucci. I am consulting now happily and I’m energized around the work again” — echoes what Unguresan said about the errors in really embedding the chief diversity officer role.

“I think more often than not in these companies, optically, it remains a party of one person running a ‘department of function,’ and that’s very hard. And this work, by definition, is all about change. It’s all about culture change. A big part of it is change management. That is not something I think can have an overwhelming amount of success with one person,” Tirado said. “So you’re not going to provide a staff, then I definitely would hope that these folks that have been placed in these positions have really strong cross-functional partners and allies internally to help chief diversity officers with the thought leadership, the influence and the actual deployment of a DE&I agenda so that it can resonate throughout the organization and it doesn’t stay concentrated or rest on the shoulders of one individual.”

What’s more, she added, companies fail to acknowledge the realities of that individual’s own dealings with race in the world beyond their office.

“More often than not, the persons who are in these roles are people of color. There’s an emotional tax there. You’re doing the work because you’re passionate around it but you’re also living it and the impact or the lack of impact around it,” Tirado said. “So not having a full team or full staff can make this very, very difficult to move the needle and can lend itself to becoming more of a performative agenda than not.”

It’s the kind of thing that, particularly for fashion, lets racially insensitive products still make it to market even when there’s a figurehead in the diversity role. Because if everyone in the organization isn’t paying attention, or isn’t adequately equipped to question things before moving them along and, on top of that, internal processes haven’t been adjusted to allow the person (ideally, the team) in the diversity space to weigh in, there’ll be little progress made with these kinds of flubs. And these kinds of flubs are exactly what diminish brand loyalty.

“The fact that that’s still happening, again, just reinforces the fact that this is not necessarily really being embedded from a process perspective. More often than not, when we think about DE&I — and this is across all industries — it’s usually concentrated on the human resources side, the people side, [with companies thinking], ‘We’ve just got to get more representative bodies in the organization or we’ve got to develop more representative bodies in the organization.’ Or it’s purely focusing on the marketing, like, ‘We’ve just got to have more Brown and Black people and LGBTQ+ folks, different body inclusivity on our social and in our campaigns,’” Tirado said. “What [companies] often don’t do, and this is why resources and an actual team are so important, is doing that real, real comprehensive audit of all of your processes in your business to identify where the inequities are.

“And even if there’s not a blatant inequity to actually identify [it’s important to examine] where there’s opportunities to embed DE&I, not as a checkpoint, but actually as a strategic reinforcement that your brand is speaking broadly to the right people in the right tone, that your business is operating in a way that will maximize sales across all demographics, which is ultimately the goal,” she added.

The start of a solution?

Getting the right people to lead diversity roles, at least, is something HR executive search and consulting firm Frederickson Partners, which specializes in placing chief diversity officers (as well as chief HR officers and chief people officers) is working to help companies do.

But from the vantage point of founder and CEO Valerie Frederickson, most companies are still at a loss as to “where to land their DE&I function” and how to successfully hire for it. There’s also the inconsistency of where this position is placed, meaning whether or not it reports into the CEO and if the function remains siloed.

“That along with the lack of consistent C-suite commitment, the lack of understanding of this still nascent function and what it looks like, is causing turnover and the lack of the ability to move the needle,” Frederickson said.

Adding some numbers to back that up, Frederickson Partners parent company Gallagher, in its 2022 Workforce Trends Pulse Survey #2, found only 7 percent of those surveyed (data was collected from 801 U.S. companies between May and June this year), said DEI is completely integrated into their organization, that it’s a top C-suite priority and that leaders are held accountable for DEI objectives.

Thirty-one percent said DEI is “mostly integrated,” while 45 percent said it’s “somewhat integrated,” with the main focus being on compliance. As much as 18 percent said there’s no DEI integration, no vision, strategy or business case exists and there is little or no leadership involvement.

“It’s still the Wild West,” Frederickson said. “A lot of companies are still thinking, ‘oh we’ve got to do something about Black Lives Matter,’ which is really good that they want to do something, but they still tend to think sometimes that you can just hire somebody and that’s going to solve the problem.”

And chief diversity officer candidates can usually smell companies that are doing more to perform their efforts than make progress — and it factors considerably into their decisions to take on a role.

With one candidate, according to Frederickson Partners chief of staff and vice president of business development Ben Taylor, the choice between job openings came down to how honest the company was being with itself.

“I had one woman, she was African American, and she told me that for a previous role she met with six people all on the executive team, four of whom where men, two of whom were women and all were white. And she said each one of them told her that they felt the company was doing an above average job [when it came to DEI], maybe not great but doing OK for where they are because they had seen almost no DEI employee relations-related issues in the company’s history,” Taylor explained.

The competitor company, instead, both put forward an interview slate comprised of people of different diverse backgrounds and across various levels of the organization, and admitted they did have DEI issues they were grappling with.

“She said even though there were some ‘red flags,’ the transparency that came through in the early process made her feel more comfortable stepping into that role,” Taylor said. “I think the takeaway is it’s crucially important that companies don’t try to hide or downplay any issues or anything like that that’s going on in the company in the interview process because the chief diversity officers, the best ones, they’ve been through this process before, they’ll be able to see right through it.”

Taylor, too, said one of the biggest issues the clients he’s worked with have faced comes down to resources.

“It’s kind of the expected lack of resources, lack of funding. I think especially lack of a team or support. It’s far too common that companies bring in a chief diversity officer and it’s a team of one or a team of two and they’re expected to just come in and work their magic and somehow increase their diversity and inclusion surveys and flip the whole thing around on their own,” he said.

Companies, if they want the diversity results they’ve loudly committed to and posted all over social media in recent years, are going to have to do better.

And after the first step of admitting there’s a problem, the next is to have a clear idea of what’s needed most.

“It’s important that the executive team and the board get clear on what results they want,” Frederickson said. “If they want to, say, double and quadruple the number of African Americans that work for the company, then that should be the one goal and they need to give the DE&I leader the support, the flexibility to achieve that. And that might mean that the DE&I leader needs to practice some selective negligence, for example, not engage with the employee resource groups, because there’s no study that I’ve seen showing [any correlation between] investing in employee resource groups and increasing your diversity hires.

“The diversity hires are going to need to come from specifically going out and targeting people of color with a message that they can trust and getting them hired,” she continued. “Anything else will just be a waste of time, including presenting at conferences or posting on LinkedIn or anything else.”

And perhaps what some companies haven’t considered is that to hire diverse employees, the interview slate needs to be made up of more than 50 percent diverse candidates. That, according to Frederickson, is simply not enough — especially because what most companies mean by 50 percent is that it’s OK for 50 percent of the candidate slate to be white males, as long as the other 50 percent combined is diverse, including racially, by gender, sexual orientation and anything else the company is considering.

“If you want to do a certain kind of hire with a diverse candidate, in this case with women, you need to have 75 percent of the candidates be women in order to ensure that you’ll have a hire with a woman. So, we’ll talk to our clients about what they can do that’s easy: can they talk to their search firms and say 75 percent of the candidates have to be people of color and 75 percent have to be women, not just either or?” Frederickson said. “Fifty percent is just not enough; it just doesn’t cut it because, let’s say you want more people of color, if half the panel needs to be either non-whites or women, you can fill that half with white women and that doesn’t help you at all.

“If it’s 75 percent, then that interviewer has to actually, at an unconscious level, confront himself, herself and say, ‘Wow OK, most of the people I’m interviewing are, for example, people of color and gosh they’re really qualified. OK I’m going to be able to do this hire,’” she added.

The bottom line when it comes to hiring and empowering chief diversity officers is about being as committed to it and its ability to have an impact as any other C-suite role. And to focus on more than lip service to get there.

“That is one of the most important shifts, from awareness to action and from action to impact,” Unguresan said. “We ask the organizations, ‘What are you doing in diversity, equity and inclusion?’ and then they start to list their actions. We always tell them, ‘OK that’s good, but tell us what was the impact of those actions, because ultimately this is what matters.’”