Making Diversity Count
Chief diversity officers are taking their place at the highest levels of corporate America, which is having an impact on business school curriculums.

By Peter Galuszka

In mid-January, corporate America sent another signal that it is paying more attention to diversity issues, and business educators are taking notice.

American International Group Inc., one of the nation’s largest insurers, announced the appointment of its first chief diversity officer, Terri D. Austin. The lawyer and 17-year veteran of AIG will oversee  diversity initiatives within the company and advise the company’s top brass of situations among its suppliers, vendors and customers.

While AIG’s announcement was decidedly low key, the naming of another CDO at a powerful U.S. company suggests that diversity is becoming more of a factor in the corner offices of corporate America. Marquee firms like Food Lion, Ford, IBM and Merck now have CDOs.

As a result, diversity issues are becoming a hotter topic in business schools. “Most definitely, the symbolism has been bridged,” says William T. Lewis, director of the Office of Diversity Initiatives at Indiana University’s Kelley School of Business. “Its been important for companies to communicate to their internal and external constituents that they are committed to diversity.”

Bea Y. Perdue, the executive director of Bennett College’s Johnnetta B. Cole Global Diversity & Inclusion Institute, says ignoring minorities could be a big mistake. As the U.S. labor force shrinks over the next 50 years, she says companies will increasingly need to hire and retain minorities to keep pace with global competition.

Corporate executives agree. Focusing on diversity “helps us reduce turnover and improve retention,” says Pat Harris, who was named global CDO at McDonald’s earlier this year. “It really reflects who we are and what we stand for.”