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US companies vow to fight racism but face critics on diversity
Reuters
In the past, US corporations have largely remained silent as protests erupted over killings of African-Americans by police officers. That changed with the May 25 death of George Floyd in Minneapolis, which has set off a flurry of corporate statements of solidarity with the black community along with pledges of more than $1.7 billion to advance racial justice and equity.
The unprecedented outpouring of support, however, has stirred up criticism along with praise. Many social justice advocates, corporate diversity experts and investors say companies also need to focus on equity in their own ranks, especially by hiring and promoting minority workers.
The tensions show the difficulty executives face in aligning their firms with popular social causes at a time of soaring wealth and inequality and growing pressure from some investors to show leadership on societal problems. Activists, along with some business leaders, also see an opportunity amid global protests to push reform on social justice issues well beyond police brutality.
The rush of corporate concern belies the reality of workforce inequity, said Natasha Lamb, managing partner of Arjuna Capital. Arjuna is a Boston-based investment adviser and frequent filer of shareholder resolutions pressing companies - with mixed success - to disclose more data on pay equity.
“If you take an honest look at corporate America, outside their glossy diversity reports, structural bias for women and people of color remains as entrenched as ever,” she said.
Floyds death has sparked a movement with wide-ranging goals, said Fiona Ma, California state treasurer and a director for systems managing about $650 billion in state retirement assets. Its not just law enforcement at issue, she said, calling the protests a greater statement of today’s values and holding people and companies accountable.
Leaders of major companies including Comcast Corp, Nike Inc and Warner Music Group Corp have announced major gifts to advance racial justice amid the protests over Floyd’s death. Bank of America pledged $1 billion over four years to address economic and racial inequality. At least a dozen other big companies announced gifts between $1 million and $100 million for similar efforts.
Companies willingness to take strong stands could signal a substantive shift in the attitudes of corporate leaders, said Jim Paulsen, chief investment strategist for Leuthold Group, a research and asset management firm. Some is probably lip service, but I think it goes beyond that, and there’s a realization that something needs to change, Paulsen said.
Companies were mostly silent during protests in 2014 following the death of Michael Brown, who was shot by a Ferguson, Missouri policeman, and Eric Garner, who died after being put in a chokehold by a New York City officer.
Today the demonstrations are bigger and more racially diverse. Companies also face increasing pressure from investors, consumers and workers to lead on issues from climate change to gun control to immigration policy and racial inequity.
Its good for their own employees to hear this, because especially their younger employees are part of a generational group that cares more about these issues, said Francis Byrd, a corporate governance consultant in New York.
The growing corporate involvement may also reflect a shift in public attitudes on race, said R. Paul Herman, chief executive of sustainable ratings agency HIP Investor. In the past, he said, companies avoided weighing in on racial controversies for fear of alienating customers. A Monmouth University poll released on June 2 showed the proportion of Americans who consider racial discrimination to be a big problem has increased from about half in 2015 to about 3 in 4 now.
On June 1, Facebook Inc Chief Executive Officer Mark Zuckerberg wrote on his personal Facebook page: To help in this fight, I know Facebook needs to do more to support equality and safety.
Facebook committed $10 million to groups working on racial justice, and Zuckerberg’s private philanthropy has donated far more to the cause.
But the firm still faces pressure on workplace diversity. At its May 27 annual meeting, investors cast about 28% of votes, excluding shares held by insiders, in favor of a resolution sponsored by Arjuna that called for a breakdown of its median pay gaps by gender and race.
Facebook opposed the measure, saying it already discloses data showing that women and men are equally paid for similar work. A spokesman did not comment on whether it might add more pay disclosures but said the company is committed to workplace equity.
African-Americans make up less than 4% of Facebook’s workforce and about 3% of its senior leadership, compared to 13% of the U.S. populace, according to company disclosures. Other major technology firms, including Google, Twitter Inc, Intel Corp and Microsoft Corp, have disclosed similarly low proportions of African-American workers and senior managers, relative to the population.
Twitter, Intel and Microsoft representatives said the firms have set ambitious goals to increase the proportion of underrepresented minorities in their ranks.
Google spokeswoman Jennifer Rodstrom said the company would need to work to expand the talent pool externally, and improve our culture internally, if we want to create equitable outcomes and inclusion for everyone.
Monica Hawkins, a Washington, D.C.-based management consultant, said many executives struggle to raise diversity in senior management because they know too few minorities. Leaders need to expand their social and business circles, she said, because referrals are a key source of important hires.
They need to open their network, she said. That’s the work. You cant cut a check for that.
Proportions of African-American workers are much higher at firms with large numbers of relatively low-paid workers, such as retailers Walmart Inc and Amazon.com Inc, according to company disclosures. But the higher percentages don’t extend to the senior management ranks of either retailer and remain well below the level of the U.S. population, the disclosures show.
A Walmart spokeswoman cited recent comments from its CEO Doug McMillon that its recruiting and development of African-American employees and other people of color will be even more of a priority going forward. Amazon says in a workforce report that it strives for better representation across our various businesses.
When Amazon expressed its concern in a May 31 tweet over what it described as the brutal treatment of black Americans, it faced immediate blowback over facial-recognition technologies it sells to police agencies.
The American Civil Liberties Union (ACLU) responded to Amazons tweet by asking if it would stop selling technology it says supercharges police abuse. In a 2018 study of Amazons Rekognition technology, the ACLU found people of color were falsely matched at a high rate. Matt Cagle, an attorney for the ACLU of Northern California, called Amazons support for racial justice utterly hypocritical.
Reuters
Protesters defend the Nike store from looting yelling “peaceful protest” during nationwide unrest following the death in Minneapolis police custody of George Floyd, in Long Beach, California, U.S.