+1-646-6882318
nicki@theglasshammer.com

Who REALLY Takes Responsibility for Diversity – and Four Other Key Diversity Insights from Today’s Top Global Companies

By Melissa J. Anderson

Last week Forbes Insights released the results of a new survey designed to gauge attitudes toward diversity and inclusion. Probing issues like responsibility, accountability, and implementation of diversity initiatives, the study gets to the heart of how D&I is really taking place in companies across the globe.

The survey polled over 300 senior executives across the Americas, Asia Pacific, and Europe, Middle East and Africa, and conducted in-depth interviews with “more than a dozen diversity officers, board members, and senior executives from large, multinational corporations.” The companies polled “had revenues of at least $500 million and went up to more than $20 billion.” The study was sponsored by AT&T, Mattel, and L’Oreal USA.

According to the report, “Companies no longer view diversity and inclusion efforts as separate from their other business practices, and recognize that a diverse workforce can differentiate them from their competitors and can help capture new clients.”

Here’s how today’s global companies are really approaching D&I, and where they think it’s going next.

1. Who’s Really Taking Responsibility for Diversity?

According to the study, the majority of companies surveyed had programs focused on diversity and inclusion efforts. Sixty-five percent said they had diversity recruitment programs in place, 53 percent reported diversity development programs, and 44 percent said they had diversity retention programs.

Who’s responsible for their effectiveness? According to the report, 53 percent said that the CEO is ultimately responsible for diversity and inclusion efforts. Fifteen percent said the CHRO was ultimately responsible, 13 percent said the Board of Directors, 10 percent said senior leaders within a business division, and 8 percent said the COO. Other answers included general managers, senior leaders within a geography, individual managers, and other C-level individuals.

Additionally, the study asked who sits on the company’s diversity board or committee. Seventy-two percent said HR is included on their board or committee and 61 percent reported their CEO was a member. Fifty-three percent said senior division or business unit leaders and forty-six percent said heads of diversity were included.

It’s clear from the survey that the majority of respondents feel that the diversity mandate belongs to the CEO, with HR and senior leadership taking a strong role as well.

2. How are Executives being Held Accountable for Their Efforts?

According to Forbes, six out of ten companies uses metrics to track their D&I initiatives’ effectiveness, and 28 percent are in the process of developing them.

According to the report, “The most popular measure used to monitor success is employee productivity (77%), followed by employee morale (67%), and employee turnover (58%).”

It continues:

“The tools for holding senior executives responsible for their diversity programs performance are a mix of monetary awards and reviews. According to the participants, accountability is measured by performance reviews (66%), bonuses (51%), salary increases (42%), business/department reviews (48%), and promotions (41%).”

3. Where Has the Most Headway Been Made and What Dimension of Diversity Need More Work?

According to the study, companies are most active in Gender (81 percent) and Ethnic (77 percent) diversity programs. They were least likely to support sexual orientation and veteran status diversity, with only 39 percent and 32 percent reporting that their companies had programs in these areas.

Additionally, most respondents reported that diversity efforts most often break down at the middle management level. According to the study, 46 percent said a failure in middle management’s implementation of D&I programs is a barrier to success. The same percentage said budgetary issues are to blame, and similarly, 42 percent said companies are too focused on survival in the current economy to focus on diversity. Forty-one percent said a failure to understand the business case for diversity creates a barrier for D&I initiatives. Other issues included inadequate attention from senior leadership and a preoccupation with other issues.

Seven percent of respondents said there were no barriers at their company for the development or implementation of diversity strategy.

4. What’s the Real Business Case for Diversity?

According to the survey, the business case for diversity is being approached in three main ways. First of all, workforce diversity helps attract new clients

“’Companies have to have a diverse workforce,’ said Credit Suisse’s [Niki] Kesglou. ‘It’s very important to our business strategy and helps capture new clients and address business needs.’

L’Oréal USA’s [CEO] Rozé concurred. ‘While we work hard to retain our current consumers, the potential for adding new consumers is in the emerging markets. And diversity is key in this, whether we’re trying to reach men, women of different ages, or women of different ethnicities.’”

The second part of the business case reflects the growing global footprint of today’s largest companies. According to the study, as companies expand, “it’s important to foreign investors and clients to see themselves reflected in the company’s junior and senior teams.”

L’Oréal USA’s Rozé explained, “I have worked in Russia, Argentina, and Europe, and it has helped me to understand the different cultures and people.”

Third, the report says, diversity and inclusion efforts improve productivity. “At the end of the day, when you’re creating an environment where people can come together and bring their own views and feel respected, competitively, your company will do so much better,” said Debbie Storey, Chief Diversity Officer at AT&T.

5. How does Diversity Drive Innovation?

Finally, the study probed the connection between diversity and innovation. According to the report:

“Among companies with more than $10 billion in annual revenues, 56% strongly agreed that diversity helps drive innovation. ‘Because of our diverse workforce, we’ve experienced a boost in productivity. When you can move people to contribute to their fullest, it has a tremendous impact,’ noted Rosalind Hudnell, director of global diversity and inclusion at chip maker Intel.

Respondents in Asia also were more likely to see a link between diversity and innovation. In the APAC region, 56% ‘strongly agreed’ with this notion, compared to 48% in the Americas and 41% in EMEA. ‘In Asia Pacific, we’re focused on leveraging diverse skills in growth markets and getting better gender representation in senior management,’ explained Niki Kesglou, head of diversity and inclusion, Asia Pacific, for financial services firm Credit Suisse.”

The biggest companies surveyed, and respondents in the rapidly growing Asia Pacific market most strongly identified a connection between diversity and innovation. The survey didn’t delve into why these groups made this connection, but it is interesting that high-growth, successful companies are the ones most strongly supporting the diversity as a driver for innovation.

Leave a Reply