The adoption of chief diversity officers among S&P 500 firms: Institutional, resource dependence, and upper echelons accounts

• Author: Robert E. Hoskisson,Seemantini Pathak,Lynda Jiwen Song,Wei Shi
• Published date: 01 January 2018
• DOI: http://doi.org/10.1002/hrm.21837
• Date: 01 January 2018

HR SCIENCE FORUM

The adoption of chief diversity officers among S&P 500 firms:

Institutional, resource dependence, and upper echelons

accounts

Wei Shi

1

| Seemantini Pathak

2

| Lynda Jiwen Song

3

| Robert E. Hoskisson

4

1

Kelley School of Business, Indiana University,

Indianapolis, IN 46202

2

College of Business Administration,

University of Missouri, St. Louis, MO

63121-4400

3

Department of Organization and Human

Resources School of Business, Renmin

University of China, P. R. China, 100872

4

George R. Brown Chair of Strategic

Management, Jones Graduate School of

Business, Rice University, Houston, TX 77252

Correspondence

Lynda Jiwen Song, Department of

Organization and Human Resources, School of

Business, Renmin University of China,

Zhongguancun Street 59, Renmin University

of China, Haidian District, P. R. China,

100872, Ph: 8610-82500529,

Fax: 8610-82509169,

Email: songjiwen@rbs.ruc.edu.cn

Funding information

Renmin University of China, Grant/Award

number: 16XNKI008.

The importance of workforce diversity has become a salient management concern given that

demographic minorities comprise key sources of the workforce and consumers. As a result,

some firms created chief diversity officer (CDO) positions to manage workforce diversity. This

study takes a multitheoretic approach, drawing upon institutional, resource dependence, and

upper echelons theories to explain firms' adoptions of this key position. Using Cox event his-

tory analyses based on a sample of S&P 500 firms, we find that, from an institutional theory

perspective, firms are more likely to adopt CDOs when they are headquartered in legalized gay

marriage states and the accumulative number of industry CDO adoptions is high. From a

resource dependence perspective, we find that firm innovation intensity, diversification levels,

transient institutional ownership, and industry female and African American employment bases

can predict firms' adoptions of CDO positions. From an upper echelons explanation, we find

that female top management team representation is positively associated with firms' adoptions

of CDO positions.

KEYWORDS

diversity, innovation, institutional theory, leadership

The diffusion of chief diversity officers (CDOs) across large Ameri-

can corporations not only marks a milestone in firms' commitment

to workforce diversity but also attests to their willingness to invest

in it (Robinson & Dechant, 1997; Yang & Konrad, 2011). The Wall

Street Journal points out that over 60% of Fortune 500 firms have a

CDO of some kind, and several of these CDOs are senior-level

executive leadership positions reporting directly to the chief execu-

tive officer (CEO) (Kwoh, 2012). They are not only directly responsi-

ble for workforce diversity and inclusion but also play an important

role in leveraging human talent with diverse backgrounds, attaining

benefits associated with workforce diversity (e.g., enhanced creativ-

ity), and enabling a better understanding of changing demographic

trends (Dexter, 2010). In addition to designing and leading diversity

programs and providing diversity consulting service to other busi-

ness functions, CDOs also play a critical role in “orchestrating the

change that will lead to a new business culture”(Dexter, 2010,

p. 4). Armed with significant budgets and supported by high-caliber

staffs, CDOs are no longer powerless diversity promotion managers,

but play a role in shaping employee and business performance

(Hewlett, 2007).

Despite the important role that CDOs can play now, two decades

ago, human resource managers in charge of workforce diversity often

resided at the bottom of corporate pyramids and did not have prom-

ising career opportunities to pursue (Dexter, 2010). What is behind

the dramatic rise of workforce diversity managers from lower-level

“bean counters”to senior executives and the recent diffusion of

CDOs among US firms? Although diversity initiatives in general are

thought to provide a number of benefits to the company's image and

bottom line, including lower employee turnover, higher creativity and

innovation, and better business opportunities (Robinson & Dechant,

1997; Yang & Konrad, 2011), firms still differ greatly in the incidence

of the adoption of this senior executive position.

The addition of a CDO position to the firm's senior management

team represents a significant structural change. Most CDOs either

DOI: 10.1002/hrm.21837

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