CONTENTS

DIVERSIFIED SEARCH ODGERS BERNDTSON

J U LY 2 0 0 9 D I V E R S I TY O F F I C E R O V E R V I E W

Page 4 Introduction to the Diversity Officer

Page 8 Importance of Chief Diversity Officers

Page 10 Program for the Chief Diversity Officer

Page 12 Diversity as Competitive Advantage

Page 13 Diversity Leadership Holistic and Integrated Approaches

Page 17 Compensation Overview for the Chief Diversity Officer

 Diversity officers are being added each day. And in the past year several of the
Diversity Officers our team has placed include corporate and association, health care
and education. For example we have tracked three placed and are sharing their success:
Baystate Health with Bobby Rodriguez as Diversity Officer, U.S. Tennis Association
with Kevin Clayton as Chief Diversity Officer and Sherry Snipes, Director of Diversity
at the American Institute of Architects.

DIVERSITY OFFICERS
Companies must demonstrate consistent strength in four key areas:
www.diversityinc.com

CEO Commitment is the most heavily weighted area --personal involvement in

diversity, how she/he holds executives accountable for diversity success and
board-of-director demographics.

HR: Diverse Human Capital includes race/ethnicity/gender/age-demographics

questions surrounding the work force, new hires, management by levels, promotions
and retention.

Corporate and Organizational Communications examines such internal factors as

employee-resource groups, mentoring and employee surveys, and such external factors
as philanthropic contributions, multicultural marketing and web-site communication of
diversity branding.

Supplier Diversity looks at percent of procurement budgets spent with suppliers

owned by Blacks, Latinos, Asians, American Indians, women, LGBT people and
people with disabilities. It also examines whether supplier-diversity numbers are
audited and have third-party certification; whether companies include supplier
diversity in their requests for proposals (RFPs); and whether they mentor suppliers and
offer them financial assistance.
THE BEST
DIVERSITY OFFICERS
D I V E R S I F E D S EAR C H ANALYS I S , J U LY 2 0 0 9 10 FACTS
We have analyzed several hundred diversity officers and share the following facts:

1. Reporting: Diversity Officers primarily report through SVP HR or VP HR but many to COO or
even CEO depending on industry.

2. Staff: Average staff size is c. five on diversity staff (discuss roles) with many others with integrated
functions and often a diversity officer appointment in the operating divisions.

3. Diverse Leaders: Diversity Officers are diverse. Most are African American with growing trend to
find top Hispanics and Diversified search will share the analysis.

4. CEO and Board commitment: Top commitment from CEO and Board is critical and evident in
review process and vision on web sites and in recruiting materials.

5. Compensation varies by industry and estimate overall $200,000 base salary.

6. Human Resources and Diverse Talent: Greatest percentage of function is HR and talent and
diversity training and development with other work as representative internally and externally for
the company; oversight and work with Employee Network Groups (ENGs). Mentoring and on-
boarding and ancillary programs are important. Diverse talent goals and metrics are used by all.

7. Growing trend for company-wide Diversity Councils with representatives from operating
companies/divisions.

8. Business Case is now clear and the holistic programs: Best companies have ROI.

9. Diversity Officer has major role with marketing, communications and community.

10. Separate Supplier Diversity in most companies but all Diversity Officers have input and at least
bottom line with focus on MBEs. Supplier Diversity Officers become advocates and have own goals
with many companies reaching the billion dollar mark.
CHIEF
DIVERSITY OFFICER
OVERVIEW

July 2009 Analysis by Diversified Search Odgers Berndtson

Brief by Edie Fraser

CHIEF DIVERSITY OFFICER OVERVIEW
T H E I M PO R TAN C E o f
CHIEF DIVERSITY OFFICERS
The importance of Chief Diversity Officers in the
private sector, associations, health care, not-for
profits, corporations, and government has never
been more significant. This “Diversity Trends”
overview is brief. It reviews diversity officers--their
roles, responsibilities, competencies, significance.
(There is a separate document on Compensation).
The compensation ranges by industry, by
organization and certainly by position, the Chief
Diversity Officer who is a corporate or organization
officer vs. the director of diversity reporting through
the human resources infrastructure).
We also emphasize the growing role of the Supplier
Diversity Officers, many of whom are senior and all
playing a role in insuring that minority and women-
owned businesses (MBE’s) are getting their fair
share of the work. Only a fraction of the Supplier
Diversity Chiefs report directly to the diversity
officer. The large percentage report to the
Procurement Officer with dotted lines of reporting
to Human Resources.
The firm has been active in benchmarking and
analyzing the role of the diversity officer, its
function, and the office, infrastructure, and
development. We want to share our existing
knowledge of the diversity officer.
The significance of the Chief Diversity Officer is
growing; it is becoming more than just a stand
alone role, and is increasingly becoming one of
the professionals responsible for leveraging the
resources of their organization.
This overview provides insight on the functionality,
compensation, structure, competency
and background training of diversity officers.
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A successful officer will be able to grow the
program while creating an atmosphere of
collaboration and team work that elevates the
diversity program and messages, internally and
externally. The functional office of diversity has to
collaborate with the “C” Suite and with internal and
external stakeholders. The role of the diversity
officer has changed and elevated over the course of
the past five years. The best diversity officers
function within the "C Suites.”
The success of an organization’s diversity program
will not be defined by the number of staff nor
pronouncements. Rather, it will be determined by
the diversity officer and staff team on building
through innovation both internally and externally,
building advocates and results wherever possible,
leverage all resources. The chief diversity officer’s
success depends on the team’s ability to serve in a
cross-functional manner throughout the entire
organization and its members and the organizations
externally. The ability to impact talent in recruiting
and advancement with development and training
programs, linkage to programs, communications,
and marketing-- are essential. The diversity officer’s
role in best practice organizations cuts across a
range of functions to ensure pipeline development
at the members’ institutions while doing so much
more. The best Chief Diversity Officers impact the
future by combining a diverse and abundant
pipeline.
Compensation increases as most professional
diversity officers take on more complicated tasks.
We estimate from our surveys that more than 50
diversity officers earn more than $325,000 per
year (base and bonus). The value of the diversity
officer is becoming increasingly understood and
valued, with diversity becoming an association
imperative, and the compensation increase reflects
the growth in responsibility.
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CHIEF DIVERSITY OFFICER OVERVIEW
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Diversity:
There are many reasons why the diversity officer’s • Is the future workforce.
role is now an organizational imperative. • Is related to customers.
• Is the market.
• Is innovation and productivity.

Who are the leaders within diversity? Program for the Diversity
Officer:
They are the organizations whose top leaders “get”
the importance of diversity integration and
• HR System that has “pipeline
operations in a “Holistic way.” They have the
senior diversity officers at the table. movement” and measurement
of change to be a diversity
Top leadership is engaged with the Diversity Officer leader
and is Passionate about diversity.

• Strategic program initiatives

• Strong goals that are measured,

quantifiable and qualitative

• Diversity initiatives imbedded

throughout all stakeholders
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CHIEF DIVERSITY OFFICER OVERVIEW
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PROGRAM for the

DIVERSITY OFFICER

Infrastructure Leadership for Diversity 5. Community Relations

■ Leadership at the top as advocates
from CEO and “C Suite” 6. Strategic Partnerships, external networking
■ Diversity officer and team -- groups, and public policy outreach
committees, and Employee Network
or Resource Groups (ERG’s) 7. Supplier Diversity - Procurement with
■ Diversity Council: Executive Vendors
(internal and external): the trend is
one with internal executives and 8. Research
representations from external and
most have councils now through the 9. Training
different units of the organization.
10. Communications
1. Diverse Talent recruiting and retention
that is tied to long-term benefits 11. Special Events

2. Onboarding, OD, Training, and Education 12. Government Relations and Public Policy
program to affect retention
■ Work on all areas for Development 13. Special Initiatives

3. Internal Stakeholders
■ Those within the system
■ Other dependent on type of
organization

4. External Stakeholder Engagement

■ Major organizations ranging from
Black and Hispanic MBA to those
tied to the professional area of the
organization
■ Community leaders in Community
Organizations
■ Diversity Advisory Councils
■ Stockholder Relations

CHIEF DIVERSITY OFFICER OVERVIEW
FRAMEWORK
Recruiting a diverse workforce from executives to
entry level.
Talent development and pipeline advancements
are the key to retention and productivity. A focus
on engagement as well as cultural competency and
fit is fundamental to success.
Executives, senior leadership, and boards of
directors are diversity advocates as never before.
Their performance is being measured and
compensation is being affected. Leaders now equate
business growth, even stock performance, with
diversity. Boards of directors will be challenged not
just for representation data but also for engagement
as top leaders and boards are held accountable.
Huge demographic shifts prove it is a “New
America”. Consider that five states already have
altered demographics where minorities are now the
majority. These include some of the larger states
such as California, Texas, and other. North Carolina
has the greatest percentage increase of Hispanics.
One of every five American youth is Hispanic and,
combined with the immigrants and others, the
change in demographics requires diversity and
inclusion to become a key priority.
Each diverse constituency deserves our
attention: Opportunities are in each diverse area
and run the gambit: Hispanics, African-Americans,
Asian-American, GLBT, Muslim and other
religious groups, the elderly, disabled, and veterans.
The Human Rights Campaign’s fifth
annual Corporate Equality Index reported in the fall
2008 that an unprecedented number of companies
and organizations apply and try to reach the 100%
rating.
Older people are also a new diverse constituency as
well as the different generations.
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Member and market connectivity have never
been more important and diversity is the
cornerstone for much of the customer leadership
and service issues. The market place creates a
competitive advantage and value for diversity
leadership. The valuation models are compelling.
Communications and technology ties to diversity
are strong with best practices organizations.
Ethics and governance are tied to leadership as
never before.
Strategic partnerships have never been more
important.
Community and philanthropy ties to diversity are
a major priority.
Supplier diversity has a competitive advantage.
Best programs are integrated and seen as holistic
for success.
• There are strategic plans and
measurement systems.
• There is leadership aligned with a
vital CDO and board endorsement.
• There is focus on talent pipeline
“in” and pipeline advancement,
career development successes.
• There is a holistic approach as
diversity is part of each area and
every business unit.

CHIEF DIVERSITY OFFICER OVERVIEW
DIVERSITY
AS C O M PE T I T I V E AD VAN TAG E
and
DRIVER of PERFORMANCE
Diversity is related to performance in new ways.
The organizations that are more diverse and apply it
to areas such as culturally competent care will have
greater success and a larger market share, and the
bottom line will be favorably impacted. Diversity is
viewed as an organizational imperative
Talent: Diverse Talent throughout the infrastructure
as well other structures:
Recruiting and retention of women and diverse
talent: “Pipeline in and Pipeline up”
Pipeline advancement, succession planning, and
infusion of diversity and inclusion at all level drive
success.
The “Race for Talent” is on every agenda.
In 2009, there are three major areas regarding
recruitment and retention:
1) Winning the “Race for Talent” from
school entrants to faculty to networks
(gaining the best of women, minority,
immigrants, religious sensitivity) with new
solutions and success models.
2) Retention and growth
3) Engaging champions and focusing
specifically on white male engagement and
participation.
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LEADERSHIP at the TOP
PROVES CRITICAL
Measurement. Scorecards are in all areas and
everything gets measured.
■ Best organizations for diversity
demonstrate accountability.
■ Boards of directors review diversity
plans and progress.
Representation, engagement, succession planning,
supplier diversity, and executive leadership are all
measured and compensation systems are impacted
and this trend will continue to soar.
Diversity is part of the bonus plan not only for
managers.
Measurement and matrices overall are critical
barometers, including that for the top leadership
and direct reports. A Diversity Scorecard is an
ultimate accountability tool to help CEOs track
progress, identify drivers of change, and allow
executives to communicate successes to their
respective boards and diversity council members.
Its broad-based metrics are flexible enough to add
and adapt categories and metrics that may be more
aligned with your specific business strategies.
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CHIEF DIVERSITY OFFICER OVERVIEW
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D I V E R S I T Y L E A D E R S H I P:
Holistic Approach

Board of Corporate Executive Corporate

Directors Team Diversity Leaders
Council

Purchasing/
Diversity Officer Supplier
Diversity

Diversity Councils Networks & Affinity Groups

A. Overall Management A. Internal (Employee network groups
B. Functions B. External Advisory Board

Training & Compliance Customer/ Information

Recruitment Education EEO Legal Client Technology

Communication Marketing - Research &

Multi-Cultural/
& Media Measurement Surveys Retention
Urban Markets

Community Events & Third Party Government Public

Relations Foundation Sponsors Relations Relations Policy

Research &
Measurement Global

Partners Stakeholders
Communities

CHIEF DIVERSITY OFFICER OVERVIEW
D I V E R S I T Y L E A D E R S H I P:
Integrated Approach
■ Organization-wide diversity
management
■ Talent
o Representation management
o Career management including
pipeline management, succession
planning management, and overall
management
o Focus on numbers of senior level
leaders and build that pipeline
■ Internal
o awareness of diversity and how it
links to corporate strategy, using the
internal web site and building all
new mechanisms
■ External
o Innovation in communications
through quarterly and annual reports
on diversity, engagement of external
stakeholders, using a dramatic web
site, speeches and engagement with
strategic partners against key
objectives and using the
communications tools; addressing
the needs of multicultural customers
and increasing interaction with
minority business and community
leaders
Diversity management allows an organization to
examine its workforce and management future, its
supplier base, and its community engagement.
Effective management requires leadership from a
Chief Diversity Officer and other executives, from
the CEO and the senior management team.
Effective management means setting goals and
measuring progress toward them. It means seeking
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new ways of reaching customers and expanding
markets while ensuring respect for differences.
The integrated approach to diversity is the
successful one. Diversity encompasses staffing and
all aspects of talent acquisition and advancement,
market share and customer growth, supplier,
communications and advertising, technology, public
policy, philanthropy and community, and more.
I N T E G RAT I O N o f D I V E R S I TY
MAKES it EFFECTIVE
Training should be mandatory and should be done
well. The new thrust behind diversity is to use
exceptional trainers internally to work with external
“superstars.” The focus is to prove engagement and
ROI. Done well, the measurement for effective
training is diversity engagement against business
and organizational objectives. The goal is to also
boast retention because of the engagement through
the new types of training. Innovation is part of the
new process with new ideas.
TREND
Communications, multicultural, and advertising
support proves increasingly sophisticated.
Strategic communications for both internal and external,
employee communications, marketing, use of technology
for communications, and targeted advertising will grow
as will the use of data to show ROI from these activities.
Support for communications, internal and external,
Internet and extranet, through sponsorships of events
focused on market, workforce, and community are now
part of all diversity programs. Changes we witnessed
include the following:
 Diversity either has staff assigned from the
association’s public relations departments or the
diversity team has outside PR staff hired to do
the functions.
 The communications organizations are
embracing diversity.

CHIEF DIVERSITY OFFICER OVERVIEW
I N N O VAT I O N a n d
CHANGE LEADERSHIP
Innovation and change leadership are aligned with
diversity as critical to the competitive advantage.
Diversity Best Practices finds examples daily of
innovation related to engagement, creativity, and
ties that bind between diversity and innovation.
Change and innovation leaders are mixing diversity
programs and talent to drive new ideas.
TREND
Supplier diversity is more important in terms of
setting an objective and hitting 5% and using
suppliers in the business or with the organization
or government department.
PUBLIC POLICY
Public policy and government relations issues are
ever-important to diversity. Leadership changes in
the Congress of 2009 and the Obama
Administration are driving the issue for diversity.
The issue of diversity is important, from those
affecting cable and telecom to those of technology.
Then there are areas affecting talent.
For example: Immigration is front and center in
2009, from our borders with Hispanic workers to
others issues. Immigration is causing major
recruitment problems, especially for Chinese and
Indians coming to the United States. The “brain
drain” is a reality and policy has not kept pace.
Immigration is changing the landscape of many
countries and impacts corporate recruitment.
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DIVERSITY and the TIE to
PUBLIC POLICY
Diversity and the tie to Public Policy has never been
stronger. Strategic partnerships and alliances with
outside groups are more important than ever.
Trend #1: recognizing the importance of the
relationships and partnerships.
Trend #2: building the right talent for responsibility
in this area. We find that most of the leading
companies are naming Directors of Strategic
Partnership, often with additional people
responsible for Hispanic, female, African-
American, Asian-American, and other.
There are specific staffs assigned to build the
partnerships and relationships with local, national,
and global organizations. Most Best Practices
companies are engaged with strategic partners.
Trend #3: building the relationships into the
business plan for diversity. The area is rich for
recruiting and marketing. We note the following:
■ Strategic alliances: Best Practices
organizations form strategic alliances
with non-profit organizations and
advocacy groups to build community
relations with a bottom-line focus.
■ Strategic partnerships: These
relationships are formed to develop and
implement joint programs.
■ Affinity relationships: These bonds are
established for longer periods of time
because of similar, market, or
community interests.
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CHIEF DIVERSITY OFFICER OVERVIEW
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E T H I C S a n d VALU E S
Ethics and values are intrinsically tied to diversity and its success. The Diversity Officers are now taking on
ethics responsibilities or are connected with the Chief Ethics Officer and Counsel, and this area will continue to
grow in its significance.

COMPETENCIES for DIVERSITY OFFICER

■ Leadership capability
■ Influence with executive team and alignment with the team
■ Diversity experience in building effective strategy and execution
■ Previous experience and expertise in diversity-related issues/laws
■ Passion for diversity
■ Business acumen and sensitivity to unique culture
■ Cross-cultural competence
■ The ability to focus and drive results
■ Driving change
■ Building and maintaining relationships
■ Building strategic partnerships
■ Building trust and integrity
■ Organizational awareness
■ Communication skills
■ Managing organizational boundaries
CHIEF
DIVERSITY OFFICER
C O M PE N SAT I O N
OVERVIEW

2009 Compensation Analysis by Diversified Search Odgers Berndtson

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C H I E F D I V E R S I TY O F F I C E R C O M PE N SAT I O N www.diversifiedsearch.com

C O M PE N SAT I O N f o r SENIOR DIVERSITY OFFICER

DIVERSITY OFFICERS
Compensation is on the agenda for Chief Diversity
Officers as well as Directors of diversity. The salary Chief Diversity Officer
for the top diversity officer is increasing as the chart
below reflects and it is clear that it is highest with
Salary Base Bonus Compensation
more experienced diversity officers, those who Range Estimate
report to the most senior level and those who
operate in the “C Suite.” When a Chief Diversity more than $300,000 $100,000 23.3%
Officers is truly an officer within the “C Suite” the $200,000 - $300,000 $75,000 46.4%
responsibilities and the compensation are
commensurate. $100,000 - $200,000 $50,000 30.3%

We estimate salaries to be at a $250,000 base for

the senior diversity officers in the Fortune top
companies. With bonus and incentives the overall Directors of Diversity
package may be more than $400,000. The highest
paid have been those in the financial services Salary Base Bonus Compensation
industries with three who we know to have Range Estimate
exceeded $ 1 million in compensation. Times have
more than $300,000 $100,000 2%
certainly changed and even those salaries are now
more in line with industry leadership overall. $200,000 - $300,000 $75,000 21.2%

$100,000 - $200,000 $50,000 76.8%

What we note is that the corporate world has led in
compensation numbers for chief diversity officers
but some of the latest hires in higher education have
total compensation at the highest level. There are
many well-performing diversity officers at the
$150,000 base salary range as well.
some of the major retailers have grown with function
It is clear from interviews: expansion and we know of three diversity officers in the
• At companies where the diversity officer reports top range.
to the senior executives, salaries are definitely
higher. These salaries are on a rise as the function The same is true with major associations, higher
education leaders as they advance their diversity
becomes more important. officers.

• There is a difference by type of industry.
• There is great discrepancy even within an
industry. In the petroleum companies we know of
one base at $300,000 plus and another company at
$135,000. The utility industry is less.
The financial industry still is high but has fallen in
major ways not only bonus but also base as expected
with the financial market fall. The technology leaders
have senior officers. The insurance industry has paid as
positions grow in responsibility. The responsibilities at
• We focused only on base plus bonus with estimated
options.
Projection: The average salary at $170,000 and the total
compensation at $220,000 as they reflected on all
diversity officers. We have taken the 180 with the most
senior titles and responsibilities*
* Based on both written and a wide range of interviews after a
thorough list developed of the 180 most senior diversity officers.
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N E O G T IAT I N G SALAR Y a n d Executive

BONUS is CRITICAL UPFRONT
There is a major drive to select and advance more
diversity officers and have them report at a higher
level. Titles, there are more senior diversity
officers, vice presidents of diversity than ever
before, and more reporting to the CEO or President,
or with a dotted line to the top.
The support from majority (the larger, and generally
white-owned and led) executive search firms vs. the
minority-owned and led firms is a new and
considerable debate as we interview many diversity
officers.
There is a definite trend:
TREND
(1) train the majority firms as they hire
experienced minorities to recruit for them across
the board; and (2) many more dollars expended
for work by minority firms. The reasons for the
latter are that they know the marketplace of those
to place; they know diversity, and they are part of
the support for supplier diversity.
The executive diversity council gives top-level
support and credibility as the “diversity office”
leverages cross-functionality.
Driving Diversity into the Business Units and
Across the world. Diversity is being driven into
the business units. Budgets often are decentralized,
as well. The headquarters diversity budget may be
separate from the business units and global offices.
The total Diversity is being driven into the business
units. Budgets often are decentralized, as well. The
headquarters diversity budget may be separate from
the business units and global offices. The total
resources allocation and staff allocation then
receives attention from the aggregation of the
central office staff, and functions and those which
are decentralized.

C O M PE N SAT I O N R E F LE C T S
OTHER INFRASTRUCTURE
FACTORS
Diversity Officers command more base salary and
bonus

Structure
The infrastructure is changing as the responsibility
of the diversity officer is elevated. Diversity as a
function, within the infrastructure, has more clout,
staff, and leverage. Where a business is strong there
are more resources.

The formal lines and dotted lines into line and staff
functions are more pronounced.
 DIVERSIFIED SEARCH
ODGERS BERNDTSON

Diversity Practice, Washington D.C. Office 1990 M St. NW Suite 740 Washington, D.C. 20036
Phone: 202-296-5222 Fax: 202-296-5233
www.diversifiedsearch.com