More Than Lip Service

Every diversity executive wants a CEO who is committed to supporting diversity and inclusion. I’m not just talking about giving lip service, but real commitment. They can show that commitment in a variety of ways, and in many cases, they demonstrate it in somewhat common fashion. For example, it is fairly common for the CEO to chair a company’s internal diversity council. This allows him or her to see how the firm supports diversity and inclusion initiatives.

Similarly, CEOs may name diversity and inclusion one of their key strategic imperatives. By doing so, they show that success in diversity and inclusion is linked to the firm’s overall success.

Another way CEOs demonstrate commitment is to allocate funds for diversity training across their entire organization, including executives. However, there are a few CEOs who demonstrate their commitment in extraordinary ways — ways that are not often replicated by their counterparts at other corporations. I’d like to highlight some of these CEOs for their enhanced commitment to diversity and inclusion:

External councils: Many organizations have an internal diversity council, often consisting of the CEO and several other senior executives. But few organizations are bold enough to have their diversity initiatives reviewed by external executives. In 2011, beverage company MillerCoors established a nine-member external diversity advisory council consisting of external business and community leaders recognized for their visionary approaches to enhancing diversity. The council is chaired by MillerCoors CEO Tom Long and includes four other external CEOs and several presidents and vice presidents at leading corporations and nonprofits. The council advises MillerCoors on best practices, strategies, tools and research that advance diversity and multiculturalism.

Direct report: According to the Institute for Corporate Productivity, only 25 percent of chief diversity officers report directly to the CEO. Having that direct line to the corner office can give a CDO more power and visibility. Robert E. Moritz is the chairman and senior partner at professional services firm PricewaterhouseCoopers (PwC) LLP, and he has Maria Moats, PwC’s chief diversity officer, report directly to him. Having the CDO report directly to the CEO not only gives the position accountability, it provides enhanced credibility that is difficult to replicate when the CDO reports through the human resources function.

Compensation: At food services and facilities management company Sodexo, commitment and accountability is driven by CEO George Chavel. Chavel has implemented a program where 25 percent of executive-level bonuses are linked to diversity objectives. For senior managers, 10-15 percent of their bonuses are linked to diversity objectives.

Seldom has such a significant percentage of corporate officer pay been linked to diversity results. An even clearer demonstration of commitment is that if these diversity objectives are met, the bonuses are paid out regardless of the company’s overall financial performance. Global Chief Diversity Officer Rohini Anand credits the linkage to executive compensation as one of the factors that ensures that diversity will influence business decisions at Sodexo and said bonuses are critical to the successful implementation of leading-edge diversity and inclusion programs.

Board of directors: At public corporations, the CEO does not have the ability to select the board of directors members. However, he or she often wields a lot of influence over the board’s profile. Most of health care company Kaiser Permanente’s board of directors has been appointed during the 11 years that George Halvorson has served as Kaiser’s CEO. The company’s 14-member board of directors includes three blacks, two Latinos, two Asians and five women.

Most companies talked about the importance of having a leadership team that mirrors their client base. Kaiser’s board profile is one of the most diverse in corporate America and truly reflects the diverse populations the organization is trying to serve. Much of this is owed to the CEO’s commitment.

CEO commitment to diversity can come in many forms, and the aforementioned CEOs have set a high bar for their counterparts to follow. Kudos to them.