In a global environment, growing business corporations have recognized the role diversity plays in business development. However, the human resource development (HRD) profession charged with the responsibility for developing any organization's human resources, has not defined what cultural competence is and its role in improving the performance of HRD professionals. This study sought to define cultural competence and determine how it could be developed and assessed. The theoretical framework used was an intercultural perspective of intercultural competence, studies in HRD that focus on a training-culture context fit, and professional definitions of cultural competence. A mixed research method utilizing survey and personal interviews was employed to study Best Practice Learning and Diversity companies. Thirty-nine companies credited as American Society for Training and Development (ASTD) Best Award winners for workplace learning and performance were surveyed. The sample represented various sectors in the corporate industry such as information technology, financial services, manufacturing and retail. Due to a low response rate, eight senior global diversity officials from companies credited as Best Diversity companies by DiversityInc. were interviewed. Five of the companies studied were among the leading Top 10 global diversity companies. The other three ranked highly among the Top 50 diversity companies. The data collected was analyzed using grounded theory. Using this theory, the study identified attributes that describe cultural competence, and various approaches that are used to develop and assess it. Based on the study results, an HRD theory of cultural competence was developed. This theory includes: (a) a definition of cultural competence; (b) a cultural competence framework that provides performance indicators for HRD professionals; organizations, its leaders and employees; and (c) an assessment guide that provides a cultural competence inventory for HRD professionals. To ensure study validity, the survey instrument used in the study was pilot-tested among business scholars. In addition, the study addressed the issues of theoretical sensitivity such as the role of the literature reviewed, the researcher's biases, and the analytical process that was used for theory development. This study has implications for higher education and professional practice. The cultural competence framework developed in this study contributes to the standardization of HRD practices such as education, training and non-training HRD programs. The assessment guide provides a cultural competence inventory for HRD professionals. The results of this study would also be useful for companies that regularly benchmark their operations against best practices. In this way, the study contributes to the effort of aligning HRD practices to theory developed through HRD cross-cultural research