| 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: - 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.
- 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? - 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.
- 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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