Who's the Boss? Changing Reporting Structures for Equality, Diversity, & Inclusion

A lot of companies seem to be reshuffling the organisational structure for equality, diversity, and inclusion lately, with the result that EDI leaders find themselves housed in new functional areas and/or reporting to bosses with little direct experience in the field. The trend seems to grow out of the confluence of a number of different forces—the economy, the political environment, strategic considerations—and takes on different forms accordingly.

At one time, diversity managers aspired to report directly to the CEO in order to get the visibility and clout that comes from that relationship. But this never became the majority position, and in the past several years many companies that did have the chief diversity officer reporting directly to the CEO have since changed their structure. While the independence that came with reporting to the CEO was empowering, it was also often isolating. Many CDOs feel that moving back into HR or another friendly environment allows them to connect more closely with important partners such as HR business partners and centers of excellence. Not incidentally, some have also found there is a downside to visibility, and they prefer the freedom that comes from being part of a larger organisation and "flying below the radar".

An ORC survey earlier this year showed that the favorite arrangement is to have the CDO report to the chief HR officer. A growing number are putting diversity into the talent management function, headed by a vice president of talent and diversity who, in turn, reports to the head of HR. We also see a minor trend towards linking diversity structurally with Corporate Responsibility.

A development we're seeing in U.S.-based companies is less wide-spread but perhaps indicative of things to come. Three or four ORC members—companies that are among the country's largest and most respected—have recently moved diversity into the legal department or drawn an attorney out of legal to head up the function. The situation in each company may be somewhat different but there seems to be a growing concern—even in companies that have not taken this step—about how diversity efforts might increase a company's potential legal liability. The U.S. government's increased focus on enforcement, recent court decisions, and the sluggish economy have combined to produce a more risk averse climate for diversity in general. ORC's advice: don't wait for your lawyers to come to you with objections to your diversity plans. Involve them early and often; make them partners in your work.