The question is on everyone’s mind: Will this moment in race relations be different?
Not without corporate America playing a significant role, that’s for sure. Because there can be no social justice without righting economic wrongs.
In the days following George Floyd’s death in police custody last month, there was a flood of obligatory statements from companies denouncing his killing and expressing support for Black Lives Matter. Then came action in the form of pledges from companies to spend money fighting racism and increasing Black wealth: $1 billion from Bank of America, $530 million from PayPal, and $100 million each from Bain Capital, Comcast, Michael Jordan and the Nike Jordan brand, and Walmart, among others.
It’s an impressive tally, but let’s be clear: Money alone won’t eradicate four centuries of systemic racism. How those dollars get spent and what policies companies push within their own walls to hire and promote Black employees is crucial. That ultimately will determine whether corporate America is doing more than writing checks and press releases.
“We need this to be more than a moment. It’s got to be a movement. Sustainability is the key,” said Marc Morial, CEO of the National Urban League and a member of Bank of America’s National Community Advisory Council. “Corporate America has a huge role to play in building bridges, healing divisions, and helping to confront the racial wealth gap.”
The coronavirus pandemic disproportionately hurt Blacks and Latinos, and Floyd’s killing amplified those inequities. Segun Idowu, executive director of the Black Economic Council of Massachusetts, said people are in the streets protesting in part "because all we’ve been served are words, so the post COVID-19 world will require action from the corporate world.”
Idowu identifies three areas of action that should be addressed with the help of Black organizers and communities: capital (in the form of financing and giving contracts to minority-owned businesses), workplace culture (hiring Black employees and making sure they’re supported), and leadership (advancement of Black workers).
“The only senior Black person in your senior team shouldn’t be the chief diversity officer,” said Idowu.
There is hope that this moment is different, that the eight minutes and 46 seconds of a modern-day lynching captured on video will speed changes that years of unjustified killings of Black men have not.
“It completely broke white America. They couldn’t take it,” said Harvard Business School professor Tsedal Neeley, who teaches organizational behavior and leadership, of the Floyd video.
Neeley said that during times like these, companies tend to roll out go-to responses ― such as unconscious-bias training for employees ― or they blame the lack of people of color in management on a broken recruiting pipeline that’s beyond their control. Neeley doesn’t buy it. Such training is “incomplete,” she said, and the talent drought is “a fallacy" — companies just haven’t tried hard enough to hire minorities.
“These issues are eternal. They are not one and done,” she said of bias in the workplace. “We have to work at them, over and over again.”
A Stanford Graduate School of Business study from February highlights how far corporate America has to go, even though many organizations have diversity and inclusion policies, and despite the fact that studies show workplace diversity boosts profits. Among the 100 largest US companies, Stanford found that there were only three Black CEOs. Of the Fortune 100 companies, 26 don’t have any Black executives in the most senior positions.
Among the largest companies that have recently committed money to fight for equality, Bank of America, Nike, and Walmart have no Blacks in the c-suite, and Comcast has just one, according to the Stanford study.
Women have made more strides in senior management than people of color. One reason: the push for gender diversity on boards. Female directors have an outsize impact in shaping corporate culture, and having Blacks on boards can have a similar impact.
According to a 2019 database compiled by Black Enterprise magazine, there were 322 Black directors on the boards of 307 companies on the Standard and Poor’s 500 list. That means about 37 percent of the S&P did not have a single Black board member.
Three years ago, State Street Global Advisors sent a message to Wall Street, first by prodding the 3,500 public companies it invests in to add more female directors, and later calling for more women in senior management. The Boston financial services firm, a unit of State Street Corp., understood it wasn’t enough to advance women within its own ranks.
Since the launch of its board diversity campaign — embodied by the “Fearless Girl” statue standing up to the Wall Street bull — more than 680 companies in State Street’s portfolio have added a female director.
During a panel on racism organized by the Greater Boston Chamber of Commerce on Friday, State Street Corp. CEO Ron O’Hanley said the company is exploring how it can put similar pressure on companies when it comes to closing racial gaps.
“We are committed to make that kind of effort and same kind of stewardship in the area of racial equality and racial inclusion on boards and senior management teams," said O’Hanley. "The evidence shows that more diverse companies over time achieve better outcomes.”
Or business leaders could follow the example of Reddit cofounder Alexis Ohanian. On June 5, he stepped down from the Reddit board and urged the San Francisco tech company to replace him with a Black candidate. Ohanian, who is married to tennis champion Serena Williams, tweeted that he resigned "to be able to answer his black daughter when she asks: ‘What did you do?’ "
Five days later, Reddit named Y Combinator partner Michael Seibel, who is Black, to its board.
Adidas, which owns Boston-based Reebok, is taking another approach: It has pledged that 30 percent of all new positions in the US at adidas and Reebok will be filled by Black and Latinx candidates.
While changing workplace culture is important, money, of course, still matters. Over the past year, Bank of America has been working on an initiative to close racial inequities that would focus on investing in programs that support affordable housing, workforce development, and minority-owned businesses.
The bank is driven by the makeup of its US workforce of about 171,000 — nearly half come from ethnically diverse backgrounds. The bank’s 17-member board has two Black directors, though more work needs to be done — Blacks make up only 5 percent of its top management.
As the pandemic disproportionately hurt minority communities, the bank decided to add health care services as an area of focus, and it doubled the amount of money budgeted for the initiative, said Bank of America vice chairman Anne Finucane, who is overseeing the effort.
Instead of being announced early next year as originally planned, the $1 billion, four-year-program to support economic opportunities was unveiled June 1, days after Floyd’s death, in part to spur other companies to make commitments.
“It was clear to anybody looking at the landscape it was a moment that required real thought,” said Finucane. “What actions are you going to take so you can tell your family and your children and some of your grandchildren, we participated in a productive way?”
The partners of Bain Capital, the Boston private equity firm, also are stepping up their fight against racism with a pledge to give $100 million over the next decade to nonprofits focused on social justice, civil rights, and racial equality. The firm will also push for diverse representation on boards and management teams of companies it invests in.
Bain also wants to work on creating economic opportunities for neighborhoods of color, but it acknowledges that the power to bring about change can’t just come from the top down.
“It appears that society at large is coming to the realization that economic progress concentrated in the hands of a few ultimately becomes something very damaging systemically,” said Bain managing director Greg Shell. "Whether you can give $1 or $1 million, we want to inspire people across the city to work together to help assure that prosperity and opportunity is extended to all members of our society, especially those who need it most. Only then do we stand a chance at the positive change we think is possible.”
Shirley Leung is a Business columnist. She can be reached at email@example.com.