A longer view: chief diversity officers are giving management a new look--and increased profits.Key Points * Insurers are focusing on diversity and are hiring chief diversity officers. * Companies that are more diverse tend to be more profitable. * Insurers say emphasizing diversity gives them a competitive edge and opens new markets. Senior executives in the insurance industry still ask Maryanne Sherman Sherman, city (1990 pop. 31,601), seat of Grayson co., N Tex., near the Red River; inc. 1858. Originally on a stagecoach route, it is a highway and railroad junction. Manufactures include electronic equipment, processed foods, military equipment, and metal products. , president of the Association of Professional Insurance Women, why the industry needs to focus on hiring women and minorities. "They ask me, 'Shouldn't we be color-blind col·or·blind or col·or-blind adj. 1. Partially or totally unable to distinguish certain colors. 2. a. Not subject to racial prejudices. b. now?' My retort re·tort n. A closed laboratory vessel with an outlet tube, used for distillation, sublimation, or decomposition by heat. retort a globular, long-necked vessel used in distillation. has never varied: 'How many women and minorities do you have on your senior management team? How many have real power?'" "There's generally silence," said Sherman, president of Sherman Think Tank, a public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a . For instance, at the current rate of change, it will take women 73 years to reach parity parity or space parity, in physics, quantity that refers to the relationship between an object or process and the image that it can produce in a mirror. with men in the boardrooms of Fortune 500 companies, and 47 years for women to reach parity with men as corporate officers of Fortune 500 companies, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Catalyst, a research and advisory group. However, Sherman said there's a tremendous interest in talking about this subject--and even more interest when she quotes statistics showing that the more diverse companies are, the more profitable they are. (See "The Color of Money" on page 40.) The insurance industry has tended to lag behind other industries in the percentage of women and minorities in management. However, companies including Allstate This article is about the American insurance company. For the line of automobiles, see Allstate (automobile). The Allstate Corporation NYSE: ALL is the largest publicly held personal lines insurer in the United States. , American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of International Group, Aon, Chubb and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Life now have chief diversity officers at the helm of the companies' quests to become more diverse. "As the importance of having a strategic diversity initiative spreads among companies, having a chief diversity officer who is responsible for diversity is something we are seeing more and more of," said Patricia Melford, vice president of the consulting firm Global Leader. "Some companies put a chief diversity officer in place, while others have an effective diversity initiative that comes from other places. Whatever it takes to have companies that are successful in diversity and inclusion. Buyin at the top of the organization is the most important piece," Melford said. At the corporate level, many of these companies have one or more executive boards devoted to diversity. But by appointing a C-level executive to head up the initiative, the companies hope to improve their employee recruiting and retention, while becoming more competitive. "Studies have shown that diverse teams at companies produce better work and are more profitable than homogenous homogenous - homogeneous teams," said Katherine O'Brien, chief diversity officer for New York Life. "Diverse work groups foster higher levels of creativity and innovation, which ultimately produce smarter, more effective solutions and more successful achievement of goals." Recruit and Retain Corbette Doyle, Aon's chief diversity officer, said she has a simple motto: "Hire the best, build the best, be the best." "If you aren't attracting talent broadly, you can't have the best talent;' Doyle said. "We want to recruit great talent, build that talent and encourage our people to reach out and be all that they can be within the organization. Historically, it's been very easy for sales-driven white males; it's a little more difficult for people who may feel that they are the odd man out, or a minority." Talent shortages are becoming more severe. "Statistics say 50% of top management in Fortune 500 companies will turn over in the next five years," Doyle said. "I think that might be even higher in the insurance industry." Only 35% of the incoming talent pool in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. are white males, she said, while 58% of college students are women and 16% are ethnic minorities. Anise anise (ăn`ĭs), annual plant (Pimpinella anisum) of the family Umbelliferae (parsley family), native to the Mediterranean region but long cultivated elsewhere for its aromatic and medicinal qualities. Wiley-Little, the CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the for All-state, said 40% of the company's new hires are people of color Noun 1. people of color - a race with skin pigmentation different from the white race (especially Blacks) people of colour, colour, color race - people who are believed to belong to the same genetic stock; "some biologists doubt that there are important . "We look at everyone as a potential employee, a potential customer. We want to be the company that everyone wants to be with," Wiley-Little said. She added that Allstate considers diversity an important part of its branding effort. "We want people to understand that we value them;' Wiley-Little said. "If we win an award from working women of color not of the white race; - commonly meaning, esp. in the United States, of negro blood, pure or mixed. See also: Color , it makes them understand that we have women like them in the workplace who can provide insight to their needs. Demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. are changing, and it's important for us to stay ahead of that." Many of these companies have developed network groups for employees, including women; African-, Asian-, Latino- and Hispanic-Americans; gay, lesbian, bisexual bisexual /bi·sex·u·al/ (-sek´shoo-al) 1. pertaining to or characterized by bisexuality. 2. an individual exhibiting bisexuality. 3. pertaining to or characterized by hermaphroditism. 4. and transgender transgender or transgendered adj. Transsexual. employees; people with disabilities; and younger and older workers. Allstate also has groups for families with adopted children and those caring for aging relatives. The groups build relationships, plan and host leadership or educational events, and even get involved in suggesting changes to companies' marketing plans or products. All of the groups "allow people to realize that we value that constituency," said Kathy Marvel The original code name for Microsoft Network. , the chief diversity officer for Chubb. "Take the Asian-American group. It allows Asian-American employees to realize that we value them and [are] very interested in retaining them." She said the gay and lesbian group is "quite helpful in attracting all employees. Not only do gay and lesbian employees feel that this is a pretty safe place to be, because Chubb is really serious about this; other employees think if they are accepting of a gay and lesbian group, they are accepting on everything.'" Chubb was one of the first insurers to implement a formal diversity initiative, appointing its first chief diversity officer in 1996. "It was pretty forward thinking, especially for the insurance industry," said Marvel, Chubb's CDO since 2004. She said her mission "is to create an environment where all of our employees are able to contribute everything they can. Not to have anyone feel any reason that they can't suggest ideas or climb the ladder. It's all about the environment." While recruiting and retaining employees is the main focus of most CDOs, diversity does bring other benefits. For instance, Chubb's gay and lesbian employee group suggested that the company target its products toward their community. "They noticed that our policies, which allow for a domestic partner to be listed, would play well," Marvel said. "And they were right." And Wiley-Little of Allstate said the company's employee networks give employees a chance to demonstrate leadership skills that they might not be able to do otherwise. Keys to Success All of these companies have programs that emphasize the importance of education and learning, such as AIG's lunch-and-learn series, which brings in different speakers over lunch. AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group recently hosted a session on teaching employees how to deal with disabled children at home. In another program, AIG teamed with the American Association American Association refers to one of the following professional baseball leagues:
Aon also opens its educational and networking programs to its clients. "Our goal is to create multiple ways to have our people be successful. Connecting with clients is one way to do that," Doyle said. Many of the programs focus on improving relationships. In one AIG initiative, a woman golf pro gave free lessons to female AIG employees who wanted to join their male counterparts and potential clients on the golf course. "Not everyone wants to learn how to play golf, but those who do were very excited about the initiative," said Terri Austin, who was appointed as AIG's first chief diversity officer in January 2007. Quite often, business deals begin in informal networks outside the office, yet 41% of female Fortune 1000 executives surveyed by Catalyst said the lack of access to those networks stunts their career advancement. The women cited golf as the top informal network. Harvard Business School Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. now has a program to teach women golf. Diversity is more than doing "the fun stuft,"Austin added. "We plan on continuing to help people advance," Austin said. "This isn't about quotas, but it's about moving the needle on diversity." Mentoring CDOs agree that mentoring is an important part of recruiting and retaining employees. "Successful individuals needs to create road maps for their careers. What kind of assignments do I need to do to learn the skills to get to the next level?" Marvel said. "First of all, a strong mentoring relationship helps build ties to the organization," Aon's Doyle said. "From a recruitment standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the , these are people who may be more likely to be disenfranchised. The main reason mentoring is important, particularly with under-represented segments of your work force, is that workplaces are filled with unwritten LAW, UNWRITTEN, or lex non scripta. All the laws which do not come under the definition of written law; it is composed, principally, of the law of nature, the law of nations, the common law, and customs. rules. Some people have an instinct instinct, term used generally to indicate an innate tendency to action, or pattern of behavior, elicited by specific stimuli and fulfilling vital needs of an organism. for deciphering those rules, and the more similar that culture is to the one you grew up with, the easier it is to interpret those rules. The more alien that is, the harder it's going to be." For instance, one unwritten rule is that you have to ask for opportunities "as opposed to waiting for them to come your way," she said. People who didn't grow up in a white-collar family may lack a role model for corporate behavior. "It's easy to make mistakes, easy to miscue mis·cue n. 1. Games A stroke in billiards that misses or just brushes the ball because of a slip of the cue. 2. A mistake. intr.v. mis·cued, mis·cu·ing, mis·cues 1. , if you have no one to help teach you those unwritten rules," Doyle said. Aon has recently purchased software to match mentors with mentees. "Three hundred people have signed up to be mentors. We started with the African-American network, but you don't have to be African-American to join the network group. Anybody's who's interested can join" Doyle said. "We want to build a mentoring culture." The company also has established a 15-month program that teams women with an executive coach. Room for Growth Companies that are leaders in diversity also are interested in promoting the diversity of their vendors. "My focus is not just on employees, but on products, services, clients and vendors," said AIG's Austin. For vendors and suppliers--such as law firms--AIG asks about their own diversity programs. "We want to be sure we are giving minority- and women-owned businesses an opportunity, and when we work with a majority-owned firm, we are working on a scorecard to make sure they have diversity programs in place," she said. Aon also is harnessing its diversity to help its clients by launching a China Desk, which features native Chinese speakers who answer questions for Americans traveling to China and vice versa VICE VERSA. On the contrary; on opposite sides. . Aon plans to launch an India Desk and a Japan Desk as well. The ultimate goal, Marvel said, is to keep innovating. "The bottom line is, organizations that are more diverse are more innovative, and we need to keep changing to survive" Marvel said. It's a goal these CDOs share. "As our society continues to grow more diverse, we recognize that today's 'niche' market may be tomorrow's biggest opportunity," said New York Life's O'Brien. "We don't see diversity as only a marketing tool. We believe that diversity can have a positive impact on all aspects of our business, including product design and development, customer and vendor relations, service delivery and of course, our working environment." Even though they work for different companies, CDOs say they work closely with each other and with diversity leaders from other walks of life, sharing ideas and best practices. "The great thing about the diversity world is that the players in the arena are willing to share information and help each other,"Austin said. Learn More Allstate Insurance Group A.M. Best Company # 00008 Distribution: Exclusive agencies American International Group
American International Group, Inc. (AIG) (NYSE: AIG; TYO: 8685 ) is a major American insurance corporation based in New York City. A.M. Best Company # 05953 Distribution: Global, national, regional and local brokers Chubb Group of Insurance Cos. A.M. Best Company # 00012 Distribution: Independent agents and brokers New York Life Insurance Co. A.M. Best Company # 06820 Distribution: Career agents, independent agents and brokers, alternative channels For ratings and other financial strength information about these companies, visit www.ambest.com. RELATED ARTICLE: The color of money. Diversity in a company's work force isn't just a politically correct politically correct Politically sensitive adjective Referring to language reflecting awareness and sensitivity to another person's physical, mental, cultural, or other disadvantages or deviations from a norm; a person is not mentally retarded, but idea. It pays, according to two studies. Businesses with greater racial diversity reported higher sales revenues, more customers, larger market shares, and greater relative profits compared to firms with a more homogeneous The same. Contrast with heterogeneous. homogeneous - (Or "homogenous") Of uniform nature, similar in kind. 1. In the context of distributed systems, middleware makes heterogeneous systems appear as a homogeneous entity. For example see: interoperable network. makeup makeup In the performing arts, material used by actors for cosmetic purposes and to help create the characters they play. Not needed in Greek and Roman theatre because of the use of masks, makeup was used in the religious plays of medieval Europe, in which the angels' faces , according to a study by Cedric Herring herring, common name for members of the large, widely distributed family Clupeidae, comprising many species of marine and fresh-water food fishes, including the sardine (Sardinia), the menhaden (Brevoortia), and the shad (Alosa). , professor of sociology at the University of Illinois at Chicago This article is about the University of Illinois at Chicago. For other uses, see University of Illinois at Chicago (disambiguation). UIC participates in NCAA Division I Horizon League competition as the UIC Flames in several sports, most notably Basketball. . And businesses with greater gender diversity outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. those with less gender diversity, according to a study by Catalyst, a research and advisory Firm. Herring's study, Does Diversity Pay? Racial Composition of Firms and the Business Case for Diversity, was presented at a sociology conference in 2006. Herring focused on responses in the 1997 National Organizations Survey that were linked to performance measures reported in Dun & Bradstreet's Market Identifiers Plus service. He found that: * Average sales revenues of organizations with low racial diversity were approximately $3.1 million, compared with $3.9 million for those with medium diversity and $5.7 million for those with high diversity. * The average number of customers for businesses with high racial diversity was 45,525, versus 38,254 for firms with medium diversity and 23,415 for companies with low diversity. * Companies with high racial diversity were more likely to report higher-than-average market share (72%) and profitability (72%), compared to companies with medium diversity (66% and 61%, respectively) and low diversity (54% and 52%). "These results suggest that not only is having a diverse work force a good and socially responsible thing for companies to do, but in addition, organizations that broaden their pool of qualified workers also reap material economic benefits from doing so," Herring said. The study also found that racial diversity improved performance even after controlling for such factors as a firm's legal form of organization, gender composition, size, age, type of work and region. The 2004 study by Catalyst examined data from 353 Fortune 500 companies from 1996 to 2000. Companies were divided into four roughly equal groups based on the representation of women in senior management. The top quartile Quartile A statistical term describing a division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations. Notes: Each quartile contains 25% of the total observations. of 88 companies with the highest gender diversity on its leadership teams was compared with the bottom quartile of 89 companies with lowest gender diversity. The study found that the top quartile had a 35% higher return on equity and a 34% higher total return to shareholders compared to the bottom quartile.
More Diversity=More Profits
Average return on equity
by gender diversity top
and bottom quartiles--all
industries.
Top quartile companies 17.7%
Bottom quartile companies 13.1%
Average 15.7%
Total return to shareholders
by gender diversity top and
bottom quartiles--all
industries.
Top quartile companies 127.7%
Bottom quartile companies 95.31%
Average 109.9%
Source: Catalyst
Note: Table made from bar graph.
Still a Man's World
Chief diversity officers aim to increase the
number of women and minorities in senior
management. A look at current female representation
in the boardrooms for select
industries:
% of % of Women
Women Corporate
Category Directors Officers
Real Estate/Leasing 25.0% 14.3%
Retail 18.1% 18.5%
Insurance/Finance 16.0% 16.0%
Manufacturing 14.0% 13.4%
Professional/Scientific/Technical 12.0% 11.4%
Transportation/Warehousing 11.8% 20.3%
2006 figures
Source: Catalyst
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