COMPANIES FOR
DIVERSITY
and “people-based” objectives account for half of
each performance assessment.
“When you have that type of commitment
up against headwinds of business pressures
and you don’t even falter, it becomes part of
your DNA,” says Parker, who chairs the cross-functional 28-member PepsiCo Diversity and
Inclusion Governance Council for North
America, reporting directly to Nooyi. “When
you have robust dialogue and strong alignment, execution is automatic.”
Unless the board is fully engaged in setting
diversity as a strategic priority, it would be
extraordinarily difficult—even for the most
passionate CEO—to get and keep it on the
agenda. For companies that must overhaul
longstanding operating structures to compete
in a technology-based global environment, this
is especially crucial.
CEO COMMITMENT
10 0%
M a nagem ent
80
TOP 10
TOP 50
BOT TOM QUARTER*
60
40
20
M eets Re gula rly
Chairs
Diversity
Council
Compensation
Tied to Diversity
With Employee-Resource Groups
*Bottom quarter of companies in survey. There were 317 participants.
Fortunately for Kodak—now in its last year
of a massive four-year transition from a film-based to a digital business model that included
the creation of the Global Diversity &
Community Affairs Office led by the chief
diversity officer and director of community
affairs and vice president, Essie Calhoun—“the
commitment was here the day I walked in the
door,” says Perez, who joined Kodak as president and chief operating officer in 2003 and
took on the CEO role in 2005 and chairman
in 2006. “Our board of directors was committed to diversity and inclusion when our paths
converged. That’s key,” he adds.
Kodak’s board is 45 percent people of
color and 27 percent women, compared with
19 percent and 19 percent for the Top 50 and
14 percent and 15 percent for the Fortune
500, respectively.
In 2001, Kodak commissioned an external
diversity council comprised of a cross-section
of leading professionals, including then
Spelman College President Dr. Johnnetta B.
Cole, who this month will retire as Bennett
College president, and former U.S. Deputy
Attorney General Eric Holder, to review
Kodak’s diversity work and establish guidelines
for improvement. The two-year charter ended
in 2003, and a year later, the board adopted a
resolution to implement the council’s recommendations. Then Kodak’s strategy changed.
Last year, Perez brought the external council back for an update on Kodak’s diversity
progress to ensure its policies aligned with its
new objectives and issued an outstanding invitation for it to return in 2007. To promote
accountability for the guidelines set forth by
the council in 2001, Perez and Calhoun evaluate senior executives’ performance on business-line-specific diversity metrics and goals around
supplier diversity, recruitment and retention
and multicultural marketing, to name a few.
Calhoun, in turn, evaluates Perez. In 2006, the
board of directors self-imposed a set of performance metrics around diversity to hold
itself accountable as well.
Tying incentive compensation to diversity
makes a compelling argument for initiating
cultural change, provided expectations are set
high enough to make an impact. Sodexho
CEO and Chairman Richard Macedonia ties
25 percent of executive-team members’ and
10 percent to 15 percent of managers’ bonuses
to diversity, and has committed to paying it
out whether the company had a good year or
not. Some years the diversity bonus was the
only one paid, says Rohini Anand, senior vice
president and chief diversity officer for
Sodexho, No. 13 in the Top 50.
