Having worked in the C-Suite for the past decade, I have seen many CFOs, COOs and CMOs become CEOs.
But I’ve never seen a chief diversity officer (CDO) step into that role.
I used to joke that the difference between being a CEO and CDO was only one letter. Yet after learning the numbers, I realized that the gap is much wider, and the problem much deeper.
In this fiscal quarter alone, Starbucks, Outback, Red Lobster, Nike, Boeing and Expedia each have new leaders in the top seat. CEO exits are up 50% from the same period last year.
I was recently speaking with my longtime friend Corey Smith. A 20-plus-year corporate executive, his career has spanned many areas of business across some of the world’s most reputable companies. Today he sits in the C-suite as a head of diversity. After discussing the ever-evolving careers of our peers and ourselves, the conversation shifted to the wave of CEO departures and, more interestingly, who got the call to lead those organizations.
Almost simultaneously, we both asked, “Why aren’t CDOs or heads of diversity ever considered for the top role within a company?”
It was an aha moment.
To be fair, I don’t know for certain if any CDOs have been considered, vetted, or interviewed for a corporation’s top post. But one thing I do know is that none have been selected.
In fact, of all the diversity leads at Fortune 5000 companies, I haven’t found not one example of a CDO ever being named CEO, either as a replacement or as an advancement into a vacancy. And after a bit more digging, I couldn’t find an example of a CDO becoming a CMO, COO or CFO either.
Candidly, I’d welcome being proven wrong, if anyone has an example to share.
Is The CDO Role A One-Way Street?
The CDO position in corporate environments is a relatively new position. While CFO, COO and CMOs have been around for 100-plus years, the CDO has been in mainstream companies for about 20 years.
But in business today, it seems like the CDO role a one-way street.
Prior to becoming a corporate CDO, I sat on the executive team of Magic Johnson Enterprises and worked alongside Mr. Earvin “Magic” Johnson as the president of one of his companies. He was my mentor in business, teaching me how to show up and stand out—as well as how to deliver, stay visible and do it all again tomorrow.
In 2012, Madison Ave tapped me to become a CDO, to ensure that the creative messages we were developing for clients hit the mark. It was a new position but an important role within the company, designed to monitor the pulse of domestic emerging markets that drive the US economy.
For me, becoming a CDO wasn’t a demotion or a position that I perceived as less than. It was a position I was happy to help shape within our organization, so we could win business, secure future clients and empower our colleagues by boosting their cultural competency.
By 2045, America will be majority people of color. It is estimated that Black Americans’ spending power sits between $1.4 and $1.8 trillion annually. When you add in Latinos’ purchasing power, which in the US reached $3.4 trillion in 2021, and Asian Americans, with $1.3 trillion in buying power, that totals at least $6 trillion of spending power—an economic bloc comparable to the combined gross domestic product of Mexico, Canada and Italy combined.
What Is Holding CDOs Back?
Today, the good news is that 59% of Fortune 500 companies have CDOs, which is much higher than in 2019.
The bad news? Their tenure is by far the shortest among C-suite executives. Recently, as many as 60% of CDOs left their jobs at S&P 500 companies. The average tenure for a CDOs is 2.9 years, compared to an average of seven for CEOs. After being CDO, 58% leave the company for outside opportunities, the highest percentage of any C-Suite role to do so.
Why? They aren’t being offered, groomed, or positioned to take on other roles within the company.
In 2023, eight Black CEOs were running Fortune 500 companies (1.6%). It was the highest number since the list was first published in 1955. Compared to the representation of Black Americans in the labor force (13%), we still have some work to do.
All of this brings me back to the question: If CDOs are already in the C-suite, why aren’t they getting placed in other C-Suite positions?
This issue involves five areas of concern I call “P.O.E.M.S.”
I believe these issues are not only keeping CDOs out of top positions within companies but also limiting the promotions of people of color at scale throughout organizations.
1. Perceived Value. In a visual society, for better or worse, optics at times override intent. Perceived value of those in or around diversity roles has been diminished by politics, loud detractors and a social narrative of fear that has swung the pendulum 180 degrees from where it stood in 2020.
2. Opportunity. CEO roles send a message about the direction an organization wants to take going forward, and the changing of the guard arises infrequently. Due to diversity’s perceived value, the opportunities for top spots often aren’t shared. So diversity officers are unaware of the roles and are not asked to apply. This goes for key work assignments too.
3. Experience. Even though diversity leaders may have had many other executive roles within a company, somehow their previous experience isn’t factored into their qualifications. I sometimes hear that CDOs don’t manage a P&L, don’t work with clients, aren’t leading global business or don’t have a proper direct reporting structure below them. Other roles may not have those duties either, yet they funnel into CEO positions with greater frequency.
4. Math. No one wants to be the first person to break the glass. It’s unlikely the needle will move on this issue until statistics start showing that the CDO can generate greater value—whether monetary or otherwise— proving that they can be the CEO. I like to think we’re close to getting that visible leader we can point to as the North Star for the undeniable value of CDOs.
5. Subjective Meritocracy. Many policymakers in both the private and public sectors believe that diversity is the opposite of meritocracy. The talking point is, If the best people always rise to the top, why do you need a diversity officer? As someone who knows firsthand the subjective nature of who does and doesn’t get a chance within an organization, I can verify that this reasoning is flawed.
A collective understanding is necessary
Diversity officers, whose roles were originally intended to help companies carry on the important work of ensuring that everyone has a seat at the table, operate in a state of invisibility, with many of them being minimized, worked around, let go of or transferred out of their roles.
I want to challenge all boards of directors, C-suite executives, executive committees and leadership teams to ask: Is it time to eliminate the blind spot diversity leaders perpetually live in? Is it time to let them lead, by driving consumer and colleague messaging, marketing and more?
Diversity is at the forefront of American culture. It’s critically important to business and society—and, if we’re being honest, the U.S. economy at large.
It’s time we empower a CDO with the opportunity to be a CEO of a Fortune 5000 company. Executives like Corey, and so many others, have earned it. In many cases, they’ve worked twice as hard to secure the position they’re in today. And that work ethic is a quality that every company should want in their top spot.