To Make Progress in Talent Management, Your Company Must Have An Executive Diversity Council

January 3, 2018 1:26 pm

By Shane Nelson

At an event early last year, I had a conversation with a D&I leader at a company in the beginning stages of D&I management. The leader expressed frustration over the lack of engagement by senior leaders with the company’s resource groups. I asked if the company had an executive diversity council. It did not. It was clear to me why that D&I leader wasn’t making progress with the resource groups.

Through 17 years of running the Top 50 competition and 14 years of operating the benchmarking practice, we’ve identified three best practices critical to making consistent and/or rapid progress in hiring, developing and retaining diverse talent — executive diversity councils, mentoring and employee-resource groups (ERGs). Although these three best practices are intertwined, the executive diversity council is the most critical by far.

The purpose of an executive diversity council (EDC) is to set and govern an organization’s D&I strategy. The EDC is a board of directors for D&I management. The main role of a board is to hold the CEO and her/his direct reports accountable for results. The same goes for the EDC but specifically for D&I management-related items such as recruitment, promotions and retention. By definition, if stakeholders are held accountable for these metrics, it means the metrics are tracked vigorously.

If your company has a D&I strategy but doesn’t have an EDC, odds are that strategy isn’t being enforced. Using the 2017 Top 50 data, we compared companies that had EDCs with those that did not. The deepest contrast we found between the two groups was in mentoring.

Senior leaders and managers at companies with EDCs were more engaged in mentoring programs than their counterparts at companies that didn’t have EDCs. On average, companies with EDCs had 149 percent more level 1 (CEO and direct reports) employees and 78.7 percent more level 2 (one level below CEO and direct reports) employees participating in mentoring than those companies without EDCs.

The human capital results are advantageous for those with EDCs. Those with EDCs had 50 and 20.4 more percent of their management promotions go to racially diverse people and women, respectfully, than those companies without EDCs.

In July, Deloitte announced it would do away with its business resource groups (BRGs). Deloitte’s rationale for doing away with its BRGs was that it wants to get a broader buy-in, specifically from white males. The firm’s decision indicated that it did not see its resource groups as a best practice in D&I management anymore. We at DiversityInc, and countless others participating in the Top 50 survey, obviously disagree.

Circling back to that D&I leader I had that conversation with, it was clear that by not having an EDC, the best practice of having ERGs was ineffective. I hope that company does not disband its ERGs but rather take a break and implement an EDC first before proceeding.

The average for the Top 10 companies on our list is 7.2 EDC meetings per year, and the CEO chairs the council in seven out of the top 10 companies.
Since the company is at the beginning of it D&I journey, its EDC should meet 12 times a year. It’s also imperative that its CEO chairs the council to signal the importance and urgency of making progress.