Making Diversity Count: Chief Diversity Officers Are Taking Their Place at the Highest Levels of Corporate America, Which Is Having an Impact on Business School Curriculums

Article excerpt

In mid-January, corporate America sent another signal that it is paying more attention to diversity issues, and business educators are taking notice.

American International Group Inc., one of the nation's largest insurers, announced the appointment of its first chief diversity officer, Terri D. Austin. The lawyer and 17-year veteran of AIG will oversee diversity initiatives within the company and advise the company's top brass of situations among its suppliers, vendors and customers.

While AIG's announcement was decidedly low key, the naming of another CDO at a powerful U.S. company suggests that diversity is becoming more of a factor in the corner offices of corporate America. Marquee firms like Food Lion, Ford, IBM and Merck now have CDOs.

As a result, diversity issues are becoming a hotter topic in business schools. "Most definitely, the symbolism has been bridged," says William T. Lewis, director of the Office of Diversity Initiatives at Indiana University's Kelley School of Business. "Its been important for companies to communicate to their internal and external constituents that they are committed to diversity."

Bea Y. Perdue, the executive director of Bennett College's Johnnetta B. Cole Global Diversity & Inclusion Institute, says ignoring minorities could be a big mistake. As the U.S. labor force shrinks over the next 50 years, she says companies will increasingly need to hire and retain minorities to keep pace with global competition.

Corporate executives agree. Focusing on diversity "helps us reduce turnover and improve retention," says Pat Harris, who was named global CDO at McDonald's earlier this year. "It really reflects who we are and what we stand for."

Harris points to the hierarchical placement of CDOs as evidence that diversity is being taken seriously. Today's diversity specialists are often placed at the highest level of the corporate command structure, along side the chief financial officer and other "C" level executives. Diversity officers were usually placed at lower levels in the 1970s and '80s and often dealt primarily with issues of affirmative action compliance.

As corporations have become more global and reach out to more complex markets, diversity has become more of a central issue. Harris compares the ascension of CDOs to the rise of chief information officers and chief technology officers in the 1980s and '90s. As information technology became more critical, those positions moved higher in the corporate executive structure.

As a "C" level executive, Harris works a short distance away from McDonald's chief executive and chief operating officers at the company's Oak Brook, Ill. …