diversity department structures

The Evolution of Diversity Department Team Structures Continues in 2021: The Importance and Influence of the CDO

DiversityInc Best Practice’s “Guide to Diversity Department Structures” is designed to help you gain an understanding of how diversity departments are evolving over time. From their role as a strategic business partner to the day-to-day work of the Chief Diversity Officer and the employees that report to them, we hope this guide will help you better understand the way leading companies prioritize diversity work. This article is part one; check back soon for part two.

For a long time, diversity and inclusion was solely an HR function, with little accountability assigned to initiatives or data to provide evidence of impact or effectiveness.

The environment, however, has changed around diversity and inclusion. As it has become a business imperative, a broader swath of executives are taking roles as stakeholders in D&I, and the function itself is moving toward analysis of more than just your talent pipeline. Diversity leaders and teams are growing and developing budgets, metrics and long-term projections to assess how their efforts will benefit the business.

In a two-part series, we will look at how diversity departments are structured, from the Chief Diversity Officer (CDO)’s evolving role to the staff that reports in the CDO and the budgets they manage. Part one is dedicated entirely to the role and activity of the CDO.

According to data from Russell Reynolds Associates, 47% of S&P 500 companies currently have a CDO or equivalent. Nearly two-thirds of CDOs were appointed in the last three years. Since the role is relatively new, its influence and impact on the business are evolving — in many cases, it’s also expanding.

Beyond simply having a CDO, the scope of that role and the department they work within should ideally have structure.

The Role of the CDO

According to data from DiversityInc’s Top 50 Companies for Diversity survey, only 30% of CDOs in the Top 50 and Hall of Fame companies report directly to the CEO. Around 51% report to the CHRO, with the remaining 19% reporting to one the Chief Operating Officer (3.5%) or Chief Administrative Officer (3.5%). Twelve percent do not report to a superior at all.

The investment of the CEO in working directly with the Chief Diversity Officer is a way for them to have some skin in the game, so to speak. As a best practice, it is recommended that the CDO report to the CEO because it shows the importance of the position and a top-down commitment to diversity and inclusion.

Diversity isn’t a U.S.-specific issue, leading global companies to consider whether their diversity efforts should be run by a single executive or by different teams based on regional location. When companies that participated in the Top 50 were asked to identify who oversees diversity efforts in the U.S. and globally, the numbers varied by category.

  • Among Top 50 companies, 52% answered no, the same person does not manage U.S. diversity and global diversity efforts
  • Among Hall of Fame companies, 66.7% answered yes, the same person/title manages both
  • Across all brands that participated in the survey, 54.5% answered no to that question.

As for the day-to-day work of the CDO, there is a good chance that they continue reporting to the HR department and the Chief Human Resources Officer. DiversityInc research shows that nearly 80% of all companies still have diversity handled within the HR function. Designating the role to human resources makes sense, as a big part of D&I efforts comes back to talent acquisition, development and management.

The Face of Diversity

Presenting to executives is one thing, but who shares that data with the rest of your employees and the world? Once again, this tends to vary and usually involves multiple people depending on the context of the situation.

Among Top 50 and Hall of Fame companies, each of the following was listed as people who present diversity-related content to employees:

  • Chief Executive Officer (68%)
  • Chief Human Resources Officer (77%)
  • Chief Diversity Officer (79%)
  • Chief Procurement Officer (39%)
  • Chief Talent Officer (42%)

Each of these individuals will have a part to play in the execution of diversity initiatives — their collective involvement lends an air of credibility and importance to the overall culture around diversity. Ultimately, the CDO plays the most vital part in creating and clarifying the narrative around diversity and inclusion for employees, as well as taking ownership of diversity metrics and success.

Duties of the CDO

Given the C-suite title, you’d expect this individual to keep a busy schedule. Responsibilities of the CDO will vary from one organization to the next, but our research shows that the day-to-day is likely to include:

  • Attend regularly scheduled meetings with the CEO
  • Present to Board of Directors on D&I
  • Attend Executive Diversity Council Meetings
  • Regularly present to employees
  • Monitor representation metrics
  • Develop D&I goals for the organization
  • Help identify and select talent
  • Participate in talent reviews
  • Establish onboarding practices
  • Setting diversity commitments

Given the expansive nature of diversity and inclusion, it’s no surprise that the Chief Diversity Officer is becoming involved in so many different areas of the business. For this reason, we see the teams that report to them grow accordingly. While many still involve employees who split time between diversity functions and other departments, the argument for having a team focused specifically on diversity is gaining momentum.

In the 2021 Top 50 Companies for Diversity survey, we asked: “how many full-time employees in your company are responsible for diversity and inclusion?”

  • Top 50 and Hall of Fame average: 9.58
  • Top 10 and Hall of Fame average: 11.29

Companies have begun to hone in on the ideal size and breadth of the team that a CDO needs at their disposal. A few years ago, when we asked the same question, respondents indicated somewhere between 7 and 14.

In part two, we’ll dig into the teams who report to CDOs, what their work entails, and what type of budgets these teams are working with.

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