Saturday, April 29th 2017


Change in the C-Suite: Kaiser’s CEO Declares Diversity’s Value

December 11th, 2014 in Diversity by

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For a black man in corporate America, it takes courage to stand up to your boss when it comes to issues of race. But that’s exactly what Bernard Tyson did. During one of those somewhat awkward discussions about diversity with a high-ranking, white senior executive at Kaiser Permanente, the executive told Tyson, “I don’t see you as a black man. I see you as a smart individual.” Sounds reasonable enough. But that didn’t sit well with Tyson, then an up-and-coming leader at Kaiser. He was pleased this Kaiser heavyweight recognized his intelligence, but he was disappointed the senior leader dismissed an essential part of who Tyson is: a black man. “I was insulted,” Tyson recalls. “He insulted my heritage.”

In Tyson’s mind, he is unabashedly black, and proud of an African-American culture that, in large part, shapes how he thinks, sees the world, and relates to other people. To disregard that, however benign the intention, is the sort of color blindness that hurts corporations. So, Tyson didn’t hold his tongue. “Wait,” he said. “I am a black man!” He paused and explained to this high-ranking executive that it was important to see the value Tyson’s race and heritage bring to the workplace—the value all black employees bring, precisely because the lens of race gives them a different perspective.

Tyson’s bold stand was risky, but it paid off. In fact, the conversation led to an all-day retreat with a diversity facilitator, who helped Kaiser managers learn to leverage the totality of people on their teams. Today, almost 10 years after that conversation, Tyson has risen to Chairman and CEO of Kaiser Permanente. The $56 billion health care provider employs a diverse workforce of 175,000, nearly 60% of which are ethnic minorities and 13% are African American. About 42% of the members of the leadership team are non-white and 25% are African American. Seventeen percent of the leadership team is made up of women.

But those numbers are rare in corporate America. Kaiser is technically a member-owned non-profit, but compares in size to a Fortune 100 company. In that sphere, Tyson is one of just five black CEOs. Worse, there are fewer African American, Latino, and Asian American CEOs leading major companies than there were back in 2007.

It’s a startlingly poor record in a nation inherently based on diversity—from our indigenous Native Americans to the Asians, Latinos, and blacks who together will make up the nation’s majority over the next generation. Much of the blame for the homogeneity in business leadership lies at the feet of the mainstream executives already at the head of the vast majority of top companies. But if real change is to occur, executives of color have to be the ones that take control of the diversity issue. Teaching, advocating, and promoting the benefits of inclusion ought to be the responsibility of those executives of color who have defied the odds and now walk the corridors of power. We must make it what Tyson calls “a front and center” issue. “It is my responsibility to say ‘there are more like me,’” he explains during our interview. “That voice of advocacy is critical, and we are uniquely qualified to make sure that we put diversity on the table.”

For years, advocacy had not been part of the repertoire for the Executive Leadership Council, a membership organization for the development of global black executives. Now, under the guidance of CEO Ronald Parker, and people like Tyson, who served as Chairman of the board through 2013, the ELC has a new charter. The mission is to change the landscape by placing 500 blacks on Fortune 1000 boards and create a net increase of 200 black C-suite execs over the next five to seven years. Leaning forward in his seat and clinching his fist, Parker says: “We have to exercise our power to get corporations to make decisions with an inclusive mindset.”

Progress has already begun at the board level. In 2010, Billy Dexter, one of three African-American partners at executive search firm Heidrick & Struggles, convinced the firm’s then CEO to support ELC’s effort to prepare promising black executives for board service. Heidrick uses its leadership assessment tools to identify a cohort of 25-30 board-ready candidates and then pairs them with Heidrick partners for further development. The program, called the Corporate Board Initiative, evolved to include a series of salon events in which black board candidates interact with experienced directors in an intimate setting. So far 11 blacks have secured board seats.  “The reality is, black executives tend to run in separate circles than whites, so you don’t get the opportunity to meet one another,” says Louis Parker, co-head of the CBI. “We have to do a much better job as African Americans to network in new circles.”

ShellyeArchambeau photo2As more blacks gain seats on corporate boards, they can make the case for recruiting African-Americans to the C-suite. After all, corporate America is a top-down machine. You have to change the tone at the top, explains Shellye Archambeau, who is a Verizon board member and one of the Fortune 100’s few black women directors. Archambeau does this by asking questions that often wouldn’t be asked if she were not on the board. While serving on a board previous to Verizon, directors conducted their regular review talent in the company pipeline. The scorecard had names, titles and performance ratings, but no indication of ethnicity. Archambeau, who is also CEO of governance and compliance software company MetricStream, asked which executives are African-American, Hispanic, Asian, etc. She suggested the scorecards have pictures to give the directors a sense of diversity in the pipeline. “If we can improve the diversity on boards and get people at the table asking questions,” she says, “you eventually see an improvement in the overall focus and awareness of diversity.”

Preparing blacks to serve on boards is one thing, but if the last few years have proven anything, progress comes slowly. It’s important to accelerate growth of blacks on boards over the next decade. Directors such as Sam Scott, the retired CEO of Corn Products who sits on the boards of Motorola Solutions, Bank of New York Mellon and pharmaceutical giant Abbott Laboratories, says we need to approach this board issue as a business problem with a supply side and a demand side. From the supply side, blacks have a lot of people ready for boards. But we haven’t addressed the demand side.

Consider the math: The average age of directors on publicly traded boards is about 63, and most boards encourage retirement by age 73. The names, ages and bios of directors is public information, which means researching who is approaching retirement is a relatively simple project. Whether the target is the 2000-odd small to mid-sized publicly traded companies or bigger companies in the Fortune 500, black power brokers such as ELC or officials from the Black Corporate Directors Conference can target boards which will have open slots. That way, blacks are not relying on someone else to open the door. “We can put a person in front of the CEO and board in advance of the opening,” Scott says. “If the CEO comes to know a new qualified person, there’s a tremendous opportunity to make the appointment.”

After landing on corporate boards, African-American executives must learn to walk the fine line between carrying out their fiduciary responsibility and advocating for greater diversity. Black board experts say it’s usually unwise to push a racial agenda immediately, but at some point it becomes a part of the job. Once you’ve demonstrated your worth on various governance committees it’s time to seize the opportunity to help make that board as diverse as possible, according to Charles Tribbett, managing partner and co-lead of the CEO & Board Practice for the Americas at search firm Russell Reynolds Associates. “There is a reason why a black individual is on the board,” Tribbett reminds us. “No doubt the first responsibility is fiduciary, but after that diversity should be the goal.”

Make no mistake, little will get accomplished without the understanding and commitment of the mainstream executives in power. That’s why Bernard Tyson’s bold stance at Kaiser was so critical. Even before we ascend to the boardroom or the corner office, black executives can never let an opportunity pass to enlighten mainstream leadership to the business relevancy of diversity. Key members of the ELC, for example, are engaging white CEOs in candid conversations about the challenges they face and the perceptions they hold when it comes to building a more diverse leadership team. Last spring David Bozeman, Senior Vice President at Caterpillar, decided to organize a CEO Summit in Chicago. He approached his Chairman and CEO, Doug Oberhelman, and asked for him to support an event on diversity in corporate leadership. Oberhelman agreed.

Next, Bozeman recruited the CEOs of Abbott and State Farm. In a meeting room at the Loews Hotel near Chicago’s O’hare airport, the three white CEOs talked openly with black executives about the problems with public education, the pipeline of qualified leaders of color, and the realities of C-suite leadership. “We had a rich dialogue that dove into different tentacles of the cause and effect,” Bozeman says.

If black executives like Bozeman and Tyson continue to use their power to wield change in corporate America, the complexion of our boardrooms and C-suites might just change sooner than later. That’s a good thing for business. “We have to bring not only different expertise, but also different life experiences into the C-suite,” Tyson says. “Greater diversity will help businesses solve the complex issues before them. One mindset is simply not enough in the diverse society in which we live.”

This article was originally published in the December/January 2015 issue of Uptown Professional magazine.

  • Mike Evers

    Valuable. Interesting. Important. And extremely well presented, as usual. Really excellent piece, Roger.