Good afternoon.
The good news: Far more Fortune 500 companies today have chief diversity officers than in 2019.
The bad: Their tenure is by far the shortest among C-suite executives.
Still, diversity heads’ increased prevalence atop corporate America offers valuable data points detailing how the role stacks up to its executive counterparts.
All told, women and people from underrepresented racial and ethnic groups make up 49% of Fortune 500 C-suite roles, according to a recent analysis from the board and leadership consulting firm Spencer Stuart.
While representation differs across roles, chief diversity officers, unsurprisingly, have the most diversity, at 89%, compared to a mere 19% of chief operating officers (COOs).
When broken down by race, 44% of CDOs come from historically underrepresented groups—and 76% are women.
Despite the growing backlash against ESG and DEI specifically, Spencer Stuart notes an uptick in the share of chief inclusion and diversity officers, suggesting that companies view DEI as critical to enhanced business performance.
At 59%, more than half of the Fortune 500 now has a CDO, representing a 2% increase from 2022 to 2023. Nevertheless, CDO turnover has been well documented. The average tenure for these leaders sits at 2.9 years, compared to seven for CEOs, making CDO tenure the lowest among all C-suite positions.
However, their turnover length, defined by Spencer Stuart as the percentage of leaders who stay in the role for just six months or less, is on par with other C-suite executives, at 7%. Chief operating officers have the shortest average tenure, with 14% staying in a role for less than six months. But that’s likely because the role often serves as a stepping stone for CEO aspirants, according to Spencer Stuart.
Finally, slightly over 40% of C-suite leaders (41%) are external hires. For CDOs, that number hovers in the middle of the pack at 46%, compared to 20% and 23% of COOs and CEOs, respectively, who are the least likely to be hired from the outside for their roles. Interestingly, chief diversity officers are the most likely to be hired from an outside industry, with 58% of external CDO hires coming from a different sector, suggesting that their skills are transferable and often industry agnostic—and that companies, at least until recently, haven’t developed a pipeline of potential CDO candidates internally.
More news below.
I’ll be in Davos for the World Economic Forum and have just a few slots left to meet with chief diversity officers. Shoot me a line if you’d like to meet on the ground.
Ruth Umoh
@ruthumohnews
ruth.umoh@fortune.com
