Bringing Diversity to the Executive Suite

When Arnold Donald took the helm as president and CEO of the Executive Leadership Council, a network of the nation’s most powerful African American executives, he came with a bold mandate to diversify America’s executive suites and boardrooms. In fact, he recently announced his “call to action,” a five-year initiative to push for at least one African American senior executive as an enterprise CEO or within two levels of that position at each of the largest publicly traded companies, and a net increase of at least 200 African Americans on such boards within a half decade.

Donald seeks to galvanize his membership of 500 senior executives around this effort at a time when African Americans represent less than 1% of the CEOs of the leading 500 publicly traded companies. And according to the report Missing Pieces: Women and Minorities on Fortune 500 Boards–2010 Alliance for Board Diversity Census, this segment has lost significant ground in America’s corporate boardrooms between 2004 and 2010. There have been some recent positive developments though: Next month, Donald Thompson will be installed as CEO of McDonald’s Corp., the world’s largest fast-food restaurant chain, and Rosalind G. Brewer was recently promoted to president and CEO of Sam’s Club, the mammoth division of Walmart that dwarfs some of the nation’s largest corporations.

Tapped to head ELC more than a year ago by its board, Donald offered the right experience and credentials to impact global business leadership. He had previously served as chairman and CEO of Merisant Co., a manufacturer of food sweeteners, and during his tenure there was named the 1997 Black Enterprise Corporate Executive of the Year. Here he discusses how “the power of inclusion can result in advancing major corporations and growth of increasing shareholder value.”

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Do the appointments of Thompson and Brewer
mean that we are starting to see a greater embrace of diversity at the top?
Both are spectacular roles and both individuals are well-deserved in getting those roles, clearly. The great thing about these appointments

is that they inspire others who have a desire for that type of role. Another positive is that the more it happens, the more people are comfortable and familiar seeing an African American that’s innovative in a major Fortune 500 corporation. In terms of overall diversity, I think that unfortunately we’re still at the onesie-twosie. One of the unintended outcomes is that people falsely relax around diversity. They say, “What are you talking about? You’ve got a guy who’s African American, and he’s running McDonald’s. You’ve got a black woman that’s running Sam’s. You have the president of the United States who is black. I mean what are you talking about? There is no need to do anything. It is over. It is solved.”

In terms of the ELC’s call to action, how do you enlist corporations to embrace that mandate?
First of all, we start with our members. [Some] already are or have been CEOs or one or two levels below in Fortune 500 companies. Many of our members already serve on publicly traded company boards. Some are in the position to do the hiring. So No. 1: they need to hire

some people, and No. 2: they need to definitely work on developing folks. No. 3: they need to win over their colleagues and their CEOs. Now how we go about that is providing the tool kit, the thought process, and the logic behind it.

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So how do you make your case for the value of diversity at the top?
We find CEOs who have experienced it and know intrinsically that diversity is a core value that allows companies to be successful. We find them, look at their best practices, and have them share it with their peers so that it is not just us talking about it.

This is not just a social justice thing, and it is not just a few more black folks getting some good jobs. It is about American communities thriving. Communities thrive when businesses succeed. If a major manufacturing plant or headquarters shuts down, that community can be impacted severely if it was dependent on that particular business. Our communities thrive with sustained business success, [which] is driven by innovation.

Share with me exactly how diversity drives innovation within corporations.
By definition innovation is thinking outside the box so it is diversity of thinking. If you want to have sustained diversity of thinking to drive sustained innovation, you have a better chance if at your leadership, decision-making levels, you have diverse people. Sixty-six percent of the U.S. population today is women and minorities. It is about everybody having a seat at the decision-making table. You have to have rich diversity of thinking that will drive innovation that will increase shareholder value and make your company successful. For a period of time [companies] can get away without it, but over time [they] will fail.

Do you view the ELC under your leadership as the chief catalyst
to diversify the executive suite?
In the end, the CEOs have to own this and decide diversity is a core value and business-critical. When that CEO decides that, it happens. We can’t do that for them, but we can help corporate America change for the better.