The deaths of George Floyd, Ahmaud Arbery, and Breonna Taylor, have sparked a catalytic call for change. Although instances of systemic racism are not new for many in the Black community, these killings have shined new light on persistent longstanding racial inequities across nearly every dimension of society. They have also sparked outrage and loud calls for change from people of all backgrounds. Along with other social institutions, corporations are being called to be a driving part of the transformation.
In line with a broader push to incorporate environmental, social and governance issues into business decisions, many corporations have felt the pressure to respond to recent events and have done so in varying ways. Russell Reynolds Associates tracked and categorized how more than 100 of the S&P 500 companies responded to the movement for advancing racial equality within the three weeks following George Floyd’s murder. Looking at their websites, social media accounts and news mentions, we found that the majority of these companies took steps to publicly acknowledge the movement and offer their solidarity with the Black community. However, it remains to be determined what long-term organizational changes and action plans will be embedded and sustained over time.
In this paper, we look at how various companies responded and what other companies can learn from them. We then offer a multifaceted set of best practices for corporations wanting to take meaningful and holistic action to support the Black community and increase their commitment to social justice.
Setting the bar
Within the three weeks following George Floyd’s murder, approximately 75 percent of large US public companies made some effort to respond to calls for racial justice from thousands of Americans of all backgrounds, including many of their own employees. The most common platform for these responses was a letter or statement from the CEO or chief diversity officer, sent to employees and posted on websites and social media.
In terms of content, these responses ranged from condemning racism to promoting greater acceptance of differences, but mostly clustered around acknowledging the recent victims of racial injustice and expressing solidarity with the Black community. A common expression of support was “We stand in solidarity against racism, social injustice and inequality.” Others took a slightly less racially focused approach, instead standing “… in support of positive and lasting change.”
Half of the corporate responses went beyond acknowledging current events to outlining an understanding of racism as a systemic issue in society. About one-third of the companies also noted the donations they were making to anti-racism groups. Those donations tallied more than $1.6 billion as of mid-June, according to a separate analysis by Axios.
A fair number of leaders – just over 30 percent – also noted that their organizations were reflecting on what was happening within their organizations and what they might need to change. Within this group, many admitted that their organizations shared fault for the persistent problems and committed to audit their diversity and inclusion practices.
Finally, a very small group of companies – 10 percent or fewer – mentioned any effort to set new goals around Black representation in their leadership, embody anti-racism as a company, or create internal accountability within those first three weeks. Some outstanding examples of this kind of action include a company leader giving up his board seat to speed the appointment of a Black director, and a top company executive publicly calling out a customer who promoted racist views.
From an industry perspective, we found that companies in the consumer sector were 14 percent more likely to respond than others and their responses also tended to be more action-oriented than those in other sectors. This is logical, as consumer companies have the most to lose by failing to publicly respond. However, companies in B2B sectors have an ongoing opportunity to step into this space - not only for business performance, but also to show solidarity with their diverse employee bases.
These actions are good first steps, and far better than staying silent. However, to drive long-term change, generic statements are not enough. Employees and customers—and potentially investors, as well -- will be watching to see what tangible actions companies take in the wake of these statements to contribute to systemic change. Therefore, it is critical the companies set bold goals that can be measured, and actively track and report out performance against goals. The companies that have at least indicated an intention to make long term change foreshadow the more integrated and enduring set of actions that we recommend corporate executives consider in their efforts to make progress on racial equity issues.
Moving forward to meaningful action
To build on this momentum – or to get it started, in some cases – leaders must start with self-reflection and listening, to better understand the specific pain points facing their organizations. In doing so, it is essential to note this is not just about the problems that face Black people. Instead, leaders must frame the issue as one that pertains to all people in the organization and requires them to work together to create lasting change. This is not just a nice-to-have, it is a business imperative. Organizations with ethnically diverse executive teams are 36 percent more likely to outperform financially than those with non-diverse teams according to McKinsey’s latest research on the topic1. As past Russell Reynolds Associates’ research has shown, executives at organizations that are most advanced in their diversity and inclusion efforts are 30 percent more likely than others to feel set up for top performance, teamwork and innovation 2.
We recommend a three-pronged holistic strategy focusing on community, company and customers. These elements enable businesses to have a full, 360-degree impact through all areas of the organization. Within each one, there are specific, tangible actions that organizations can take and objectively measure.
This dimension is about leveraging internal strengths to bolster those outside the organization. It starts locally, with companies educating and empowering their employees to make a difference in their individual communities at work and at home. It can also mean corporate efforts that work toward changing the systems -- education, economic, healthcare, and criminal justice, among others -- that feed imbalances in hiring and promotion. For some companies, this is about finding a unique way to contribute; for others, it is about finding the right partners, and for still others, it is both.