Chief Diversity Officer (CDO) – silo or critical strategic role?

Jane Farrell is Co-Founder of EW Group. She is a specialist in inclusive leadership, unconscious bias, organisational change and cultural adaptability.

“If a company wants me as their Chief Diversity Officer (CDO), they will need to pay me the same as their CFO.”

A brilliant DE&I specialist said this to me recently. Well, why shouldn’t they? If we believe that equity and diversity really do matter to us as individuals, in our organisations and in society, then the strategic and operational work involved to make it a reality needs to be properly resourced. DE&I programmes and initiatives have the capacity to transform companies, as well as their products and services, talent strategies, relationships with staff and customers, brand and cultures, and profitability.

The business case for DE&I has convinced most by now. At its simplest, companies want to recruit the best rather than, intentionally or not, people who look like those already at the top. The links between greater equity and diversity and increased creativity, innovation and higher performance are clear to many companies, and interventions are seen as a source of competitive advantage, with some elements held confidentially as a result.

What is a Chief Diversity Officer?

The role of CDOs began to emerge in the early 2000s and has gained serious traction over the past five years. The market for brilliant CDOs is hot as the focus on DE&I continues to intensify, with movements such as #MeToo and Black Lives Matter gathering global momentum, and a growing understanding that employees and customers really do care who they work for and buy from.

The average base salary of a CDO of a medium-sized firm is £150,000 per annum, with the top end being about £220,000. Gone are the days (mostly) where the only specialists in diversity sit in the middle ranks of a company, with loose links to someone in the third or fourth tier of leadership, battling away on single projects, trying to get traction in the business.

A new CDO might be responsible for reviewing a pre-existing business strategy and suggesting how DE&I could strengthen and perhaps transform that strategy. Going forwards, they would play a critical role in ensuring that DE&I was truly woven into strategies and plans from the beginning.

A brilliant CDO would have the space and authority to engage with all aspects of a business – strategy, procurement, finance, learning and development, policy and operations, for example, to ensure that work on DE&I is evidenced, measured and reported on throughout the business. They would also play a critical role in building the capacity of the board and leadership team to truly think about DE&I in every strategic decision, so that over time it becomes an inherent part of the process. This might involve some executive coaching, facilitated conversations with key people, and advising on refreshed performance management processes that address privilege and unconscious bias.

A CDO might also be responsible for the creation of the company’s DE&I narrative and ensuring all internal and external communications demonstrate the organisation’s commitment to building diversity and inclusion across their business. They would also be instrumental in setting goals and targets to support these ambitions e.g. having more Black, Asian and other minoritised people in senior roles, employing more disabled people at all levels, and/or building a more diverse customer base.

A CDO with real clout needs to report directly to the CEO or Chair, be allocated proper resources, and be seen to have the authority to demand and deliver real change throughout the organisation.

The pros and cons of a Chief Diversity Officer

The decision is whether to spend the money on a brilliant CDO or engage a specialist consultancy to do this critical work. Like most complex issues, there is no right answer. There are pros and cons to each approach.

An appointment of a brilliant CDO can make a powerful statement, demonstrating a company’s values and determination to address systemic discrimination and create truly inclusive cultures.

It can also be a trap for individuals and organisations, in which DE&I becomes a silo – ‘DE&I happens over there, the CDO oversees it’, and the rest of the company ‘gets on with the real business’, rather than DE&I being embedded throughout the whole organisations’ operations.

Is a CDO the best way to approach DE&I in organisations?

The big question is – is appointing a CDO the best way to transform organisations? Or is it better to build the capacity of all leaders, and indeed the entire workforce, to be able to articulate the ways in which they will take account of differences in their day-to-day work, whether they are a receptionist, an engineer, lawyer, or CFO?

Some will argue it is not an either-or situation. Some CDOs will be employed to design and deliver deep capacity building programmes. The concern is whether the recruitment of a CDO lets other leaders off the hook – ‘we have a CDO whose job it is to address diversity and equity, not mine’. Too many times those with specific responsibilities on DE&I at any level within a company are seen as being solely responsible for something that requires organisational and cultural change.

Which approach should be taken will depend on a number of things – an analysis of the history, culture, business strategy, current levels of knowledge and understanding of DE&I in the organisation, followed by a steely analysis of how to spend whatever resources are available to good effect.

Five top tips for creating a robust DE&I strategy

The most powerful work on DE&I includes the following five things. Please note this is not an exhaustive list.

1. Create a strategic vision that aligns with the overall company vision and values, and articulates how DE&I will transform the company in specific, measurable ways.
2. Commission a thorough diagnostic, ensuring the data needed is collected, collated, and interpreted not only on policies and processes, but also leadership styles, performance management, talent strategies and representation.
3. Ensure the pay and bonuses of leaders are related to metrics on increasing diversity and inclusion and equity.
4. Set up affinity groups that are truly connected to the company, and that support minoritised staff. Ensure the learning from such groups is disseminated throughout the company, through managers words and actions.
5. Demonstrably build the capacity of every single stakeholder to be able to say and do things, day in and day out, that drives DE&I.

If properly paid, positioned and resourced, a brilliant CDO can drive transformational change. This change can also be driven by ensuring all C-suite leaders are accountable and responsible for driving DE&I and working in partnership with specialist consultants supported by real commitment from senior leadership.