An executive diversity council (EDC) is a group of leaders tasked with managing and developing the company’s diversity and inclusion (D&I) strategies. While D&I remains front and center of an EDC’s mission, its purpose has evolved.
“There’s been a shift in EDCs and that shift has aligned with how the conversation has changed around ESG (environmental, social and governance) itself,” says Anita Ricketts, Head of Strategic Partnerships at Fair360, formerly DiversityInc. “EDCs are not just, oh they keep track of our diversity programs. They’re an arm of good governance and risk reduction, as well as protecting the shareholders and other interested parties in the company.”
How can companies be nimble and manage EDCs in this evolving environment? We spoke with five companies on the Fair360, formerly DiversityInc 2022 Top Companies for Executive Diversity Councils who shared best practices for operating EDCs.
CEO Involvement
A CEO at the helm of an EDC sends a message both inside and outside the company that diversity and inclusion are critical to its business goals. Eighty-seven percent of companies on the 2022 Fair360, formerly DiversityInc Top Companies for Executive Diversity Councils list have CEOs heading their EDCs and 53% of those CEOs set the agenda.
Dow’s (No. 1 on Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list) EDC is chaired by Jim Fitterling, Chairman and CEO, and facilitated by Alveda Williams, Chief Inclusion Officer.
“Top executive involvement is critical to the success of the EDC to drive decision making, budget decisions and accountability for I&D progress,” says Williams. “Dow’s EDC was designed with this in mind.”
State Street’s (No. 13 on Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list) EDC is led by Chairman and CEO Ronald O’Hanley.
“It’s not just chaired and then they’re not showing up. That’s just crazy,” says Sharhea Wade, Vice President, Global Inclusion & Diversity at State Street. “It’s chaired, it’s started, it’s run by him. A month in advance, I have to send him my agenda items. He will come back to me and say, “No, I want to hear this.”
O’Hanley sets the tone by opening the meeting, highlighting the three to four topics to discuss and then setting aside 45 minutes for open discussion.
“There’s this good back and forth with him,” says Wade. “He’s not picking arguments or anything. It’s more like, let’s talk about this in a frank setting. Let’s bottom this out. What can I cut through? That’s the visible leadership.”
Accountability Through Metrics and Goals
A clearly defined mission with measurable goals is essential to EDCs tracking DEI progress.
In 2020, State Street unveiled a 10-point action plan to address issues of racism and inequality by focusing on talent management, learning and hiring. Its goals include doubling State Street’s percentage of Black and Latinx representation and increasing spend with diverse suppliers over the next three years, anti-racism education for all employees and increasing civic engagement.
“Executive committee members all have quarterly business reviews with Ron and what they call an EVP scorecard,” says Wade. “On those EVP scorecards are the goals. They are responsible for making sure the work moves forward and Ron holds them accordingly in those business reviews.”
Wade says State Street executives are held accountable with scorecards and ratings, which affects their compensation. Eighty percent of Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list ties the compensation of EDC members to enterprise diversity goals.
Northrop Grumman’s Compensation Committee of the Board of Directors reviews the company’s progress in workforce diversity at least semi-annually and connects leadership accountability of diversity to executive compensation.
“We are focused on representation in all levels of management as well as our technical talent,” says Nikki Alphonse, Director, EEO and Diversity, Northrop Grumman (No. 10 on Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list). “Additional focus areas for 2023 include belonging and allyship, building the best culture and DEI training and competency for front-line leaders.”
Established over 20 years ago, Marriott International’s Inclusion and Social Impact Committee sets the hotel company’s annual DEI goals and monitors progress.
“Our President and CEO, Anthony Capuano, is dedicated to ensuring DEI is infused into our DNA and that leaders at all levels of the company take accountability for our DEI strategy,” says Ty Breland, Executive Vice President & Chief Human Resources Officer, Marriott International (No. 5 on Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list). “Our Global Inclusion Council, led by our CEO and myself, is responsible for meeting our yearly goals, ensuring our DEI approach includes our associates, customers, owners and suppliers, and keeping track of our plans, actions and results.”
Adding another level of accountability to EDCs are external and regional councils.
“Regional councils work to localize our DEI strategies, ensuring they are at the forefront of our local business priorities,” Breland adds.
Diverse Representation
One key to the effectiveness of an EDC is having the right people in the room, focusing on all aspects of diversity.
“We have voting members, which are the executive sponsors,” says Wade. “We also invite the workstream lead of the 10 Actions to the meeting as well. We’ve evolved the council not only to focus on the 10 Actions but all the diversity lenses. We have presentations around disability and presentations around our veteran’s program. That’s all embedded in the meeting agendas and those are done quarterly.”
Hilton (No. 7 on Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list) has expanded its Executive Inclusion Council (EIC) to include members of its executive committee and its company-wide senior leadership group.
“These senior leaders represent the diversity of our global workforce and have been vital in building trust, providing advocacy and establishing meaningful connections that enable us to proactively identify emerging needs across diverse communities,” says DeShaun Wise Porter, Global Head of Diversity Inclusion and Engagement, Hilton. “The addition of these advocates will help support our strategic DEI pillars of Culture, Talent and Marketplace.”
Northrop Grumman says representation from people throughout the company is critical.
“Which is why we have council members from each of the four main businesses and key functional areas,” says Alphonse. “Our council’s business representatives also co-chair their business-level councils, which ensures alignment and a link between councils across the enterprise. We currently have 24 DEI councils across the enterprise, including some division and/or business unit DEI councils. These councils are closely aligned with the business-level council, and in turn, the business-level council has alignment with the EDEILC (Enterprise DE&I Leadership Council). We include the voices of our employee resource groups, which have a liaison on the EDEILC that briefs the council on a regular basis.”
A decade ago, Ricketts says rotational positions weren’t as prevalent. But now, 87% of companies on the 2022 Fair360, formerly DiversityInc Top Companies for Executive Diversity Councils have rotational positions. These roles allow an EDC to embody the diversity of thought by obtaining fresh ideas and perspectives. It also provides opportunities for growth within the leadership team.
Frequent Communication
The evolution of EDCs has included intentional oversight and more sophisticated conversations around data, says Ricketts.
“It used to be four times a year you would get your scorecard or dashboard – that was the thing,” she says. “What does the scorecard look like? What do the metrics look like? The conversations now are much more nuanced, strategic, and all-encompassing of the organization.”
Forty percent of Fair360, formerly DiversityInc’s 2022 Top Companies for Executive Diversity Councils list converge every quarter, 53% every month and 7% twice yearly. Northrop Grumman’s EDEILC meets quarterly and the sub-teams meet more regularly in between.
“Business-level councils, which ensure alignment and a link between councils across the company, meet monthly or bi-monthly,” says Alphonse. “Business-level representatives brief EDEILC on progress at the business level and identify areas where the EDEILC can help.”
Hilton’s EIC meets at least twice a year and also has multiple touchpoints with various leadership groups throughout the year.
“Our diversity agenda and progress towards our goals are discussed quarterly during executive committee meetings and also shared with our board on a regular, ongoing basis,” says Porter.
Williams says Dow’s EDC meets regularly to align and drive inclusion, diversity and equity (ID&E) progress.
“Our Executive Diversity Council meets quarterly to ensure regular updates on ID&E progress and alignment and support for strategic actions and priorities,” she says. “At the same time, we have ongoing off-cycle communications with EDC members, which allows us to remain agile and make critical decisions in a timely manner.”
