Corporate Diversity Initiatives Need Lawyers in Leadership Roles

Organizations have been laser-focused on expanding their diversity, equity, inclusion, and belonging programs and actively diversifying their teams.

The increased interest in these initiatives has driven a dramatic increase in corporate chief diversity officer roles. According to a 2022 McKinsey survey, DEIB positions in the US quadrupled in the five years prior.

The survey noted that among Fortune 500 companies, 53% now had a CDO or similar role, with more than 60 of them appointing their first-ever diversity leader since May 2020. While this surging interest has issues (chief among them, CDO retention), DEIB programs face greater obstacles ahead.

The tide appears to be turning, and unfortunately, it’s likely that more and more corporate DEIB programs will come under legal attack, following the US Supreme Court decision that effectively ended race-conscious admission practices in higher education.

How will this—and potential future decisions—impact for-profit businesses’ DEIB efforts? The full ramifications and extent of the ripple effect are unclear, but one thing is certain: Multiple legal challenges are coming.

This means companies will need to reconsider the profile, skill set, and mandate of their CDOs. Many current CDO roles have focused primarily on HR functions and talent acquisition, which, of course, is an important aspect of the role.

However, given the murky waters where DEIB programs operate, CDOs with a strong legal background will be extremely important for the role’s future viability. We’re already starting to see this trend manifest, as several top law firms have already expanded their practices to include DEI consulting—and we only expect more to follow.

Legal-Savvy CDO

DEIB professionals do more than just recruit diverse candidates into an organization and plan internal initiatives. Executives who lead successful DEIB programs that are viewed as critical business drivers wear many hats—beyond the crucial responsibility of monitoring the legal implications of DEIB based on each legal opinion.

They drive diverse talent acquisition, work with executive management to ensure DEIB strategy is incorporated into all aspects of the business, run training programs to reduce unconscious bias, and are public-facing advocates for a company’s DEIB initiatives—among other critical functions.

DEIB executives with a legal background will be best positioned to drive initiatives, while also ensuring a company is incorporating best practices and operating within the constraints of a complex legal landscape.

Lawyers are most capable of understanding and articulating the regulatory implications and potential employment issues of each decision (for example, the DEI components in Sarbanes Oxley).

They will also be thinking about risk—legal, reputational, financial—and implications of the public-facing and internal initiatives and decisions, ensuring the company isn’t exposed to excess liability—particularly critical in today’s environment.

The best attorneys are incredibly skilled at articulating strategic, business, and legal messaging to widely varied audiences. CDOs will need to hone this skill in the challenging days ahead.

Great in-house attorneys are adept at more than just interpreting law and keeping the company compliant. They’re strategic thinkers and influence builders. They’re well-versed in managing conflict, as well as persuading constituents. They have experience working with cross-functional teams and leading (and vetting) training programs.

A lawyer’s overall responsibilities are uniquely aligned with the experience needed in a DEIB professional and provide the added advantage of bringing deep legal understanding.

Path Forward

In the last few years, many organizations have brought in DEIB professionals. In our recruiting work, one concern we hear repeatedly is that their roles were created in a reactionary manner, and therefore, their organizations didn’t have clear expectations or real buy-in from the executive leadership team.

This is one of myriad reasons CDO retention has been difficult. Many tell us their roles weren’t created in a way that set them up for success. The result of this disconnect has been that the average CDO tenure is less than two years.

The changing legal landscape around diversity provides organizations with opportunities to clarify those expectations and set a clearer path for the value a CDO brings to the table.

The current backlash against DEIB programs will lead to the CDO role having a dual focus—with a large part of the role focused on attracting and retaining diverse talent and building culture. Many organizations have made real progress in employee engagement, and leadership will want to stay the course.

Younger generations are demanding diversity within the workplace, evidenced by countless recent employee surveys, including our firm’s most recent polls of Gen-Z and Millennial employees. To retain talent, corporations must remain resolute in their support of their DEIB programs.

The second area of focus for incoming CDOs will likely be legal and compliance—the most successful CDOs will have to thread the needle between driving DEIB initiatives and helping organizations navigate often-divergent legal landscapes.

When we look at “ideal” skillsets for the challenges ahead, candidates will need a firm grasp on labor and employment matters, the ability to stay abreast of the changing legal landscape, and a strong track record as a DEIB advocate.

Despite the coming challenges, having an attorney at the helm will best position corporations to continue to advance and grow their DEIB initiatives.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.