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As
protestors around the world gathered to chant “Black Lives Matter''
following the killings of three unarmed Black Americans, Ahmaud Arbery,
Breonna Taylor, and George Floyd, CEOs were forced to confront a
challenge they probably didn’t cover in B-school: How should a company
respond to systemic racism?
Black Lives
Matter was not a new movement, nor was the push to make corporate
workforces more representative of the population. But 2020 may prove to
be a turning point for measurable change, with companies across
industries publicly supporting Black Lives Matter and calling for an end
to institutionalized racism in the U.S.
- At the end of May, Netflix tweeted,
“To be silent is to be complicit. Black lives matter. We have a
platform, and we have a duty to our Black members, employees, creators,
and talent to speak up.”
- It soon became
convention for companies to display BLM material as part of their visual
identity. Amazon put the Black Lives Matter banner at the top of its
homepage.
As many
pointed out, just saying Black Lives Matter without pledging to do
anything about it would probably do little to challenge centuries of
racism. And companies such as Adidas were criticized for outwardly supporting racial equality while failing to support their own Black employees.
Companies did take action in 2020, but their initiatives didn’t come from a single playbook:
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Hiring pledges: The CEOs of 37 companies, including General Motors, Walmart, and Merck, joined together
to form OneTen, a coalition that has made a $100 million pledge to hire
1 million Black workers over the next decade. Starbucks said it would tie executives’ pay to their ability to build diverse and inclusive teams.
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Sourcing: Major retailers, including Macy’s and Sephora, signed the 15 Percent Pledge, which asks retailers to devote at least 15% of shelf space to products from Black-owned businesses.
- Others rebranded racist
products (say hello to Ben's Original rice), donated gobs of money to
causes dedicated to racial equity, and, of course, posted black squares
on social media.
Some
organizations focused their efforts on improving minority representation
in the C-suite. After all, less than 2% of leading executives at the
top 50 companies are Black (five out of 279), per USA Today.
- The Nasdaq stock exchange has proposed requiring
all of its nearly 3,000 listed companies to have two diverse directors
on their boards within the next five years. Over three-quarters of these
companies don’t currently meet the requirement.
- California became the
first state in the U.S. to enact a board diversity quota earlier this
month. All publicly traded companies headquartered in CA must seat one
diverse director by 2021.
- Leading investment firm BlackRock has threatened to vote against board directors who don’t address racial inequality in their companies.
Will this time be different?
The gap
between deciding to have a more diverse workforce and actually following
through is as wide as the gap between having ingredients in the fridge
and having Christmas dinner.
Since 2016, Google’s churned through
three diversity officers while its employee base has remained roughly
the same: 6% of employees identify as Black, 7% as Latino, and 33% as
women.
At Wells
Fargo, CEO Charlie Scharf wrote in June that the lack of Black workers
at his company was the result of a “very limited pool of Black talent to
recruit from.” Following criticism online, Scharf walked those comments back
and said that “across the industry, we have not done enough to improve
diversity, especially at senior leadership levels.” Just over 4% of the
bank’s senior leadership was Black in 2018, down from 8% in 2015.
Melinda Briana Epler, CEO of Change Catalyst, which helps tech companies with their diversity initiatives, said,
“If you’re looking for candidates in the same places you’ve always
looked, then you might not find a lot of underrepresented people.”
So where are corporations looking for talent?
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Historically black colleges and universities: Tesla wrote in its diversity report that it’ll recruit more
from HBCs, while Apple’s HBCU Scholars Program offers leadership
opportunities and internships. Some firms are doing away with their
college requirement altogether to further reduce barriers to employment;
the OneTen promise makes a point of this.
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Nonprofits: 501(c)(3)s like CodePath
are working to boost diversity in tech by offering college students
no-cost coding courses and career support. Its backers include Facebook,
Walmart, and Microsoft.
-
Specialized recruitment firms: Diversity, equity, and inclusion (DEI) services are having a moment.
This year, the consultancy Bain created a DEI division to meet high
demand for services like inclusion training, supply chain
diversification, and of course, recruiting diverse talent. Division head
Julie Coffman calls the sector “the next digital,” while a partner at
another consultancy says it’s the “fastest growing business line we have
right now.”
Zoom out: As my colleague Alex Hickey wrote
back in June, many of the most influential brands on earth have made
powerful commitments to improve racial equity this year. But their
legacy in confronting racial injustice will be determined by their
actions when the world isn't watching.
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