Corporate Social Responsibility in the Age of George Floyd

By now we've all heard about the horrific and gruesome death of George Floyd at the hands of officer Derek Chauvin on May 25th that has led to both peaceful protests and civil unrest. Watching the video of Chauvin kneeling on Floyd's neck for several minutes until his death was gut-wrenching, deeply saddening, and a reminder that racial injustice continues to undermine equality in America. An ABC News poll found that almost three-fourths of Americans view Floyd's death as an underlying racial injustice problem. The public outcry has been spread far and wide, and for good reason. If you're watching TV or scrolling through social media platforms, you will be flooded with heartwarming and serious messages from people in your family, your friends, those you admire, and companies you purchase from.

For me, the most surprising, yet noteworthy, of all of these messages came from NBA Hall of Fame superstar Michael Jordan. The only time in my life when I was a legitimate sports fan was growing up watching the Boston Celtics during the time Michael Jordan was going head-to-head with Larry Bird. I watched all ten episodes of "The Last Dance", a documentary spotlighting Jordan's career during that time when he won several championships for The Chicago Bulls. One of the moments that really stood out to me during the series was when Jordan was called upon to support Harvey Gantt's run for a Senate seat in North Carolina and declined. Gantt was an African American man that would have benefited from Jordan's endorsement. Jordan went on record saying that he didn't want to participate in any political or social movements despite being a major African American figure because "Republicans buy sneakers too." Also, during the latter part of his career with The Bulls, he declined many interviews because he was under public scrutiny for his supposed gambling problems. And even now, it's pretty much impossible to interview Jordan, as I've tried a few times to do so.

Fast forward to June 1st when Jordan made his first public statement on racism and violence following Nike's statement a few days earlier. "I stand with those who are calling out the ingrained racism and violence toward people of color in our country," said Jordan. After watching the documentary where I witnessed Jordan's resistance to being a social activist, and then reading this post, I told myself "wow, if Jordan's even willing to come out against racism when he views himself as just a basketball player, that means a lot."

I stayed out of this conversation intentionally for a number of days because I wanted to educate myself first before responding thoughtfully and deeply. I also didn't want to be yet another voice of privilege speaking out while in the safety of my home. I woke up on June 2nd and before I left my bed, I was about to publish my daily Instagram post that wasn't related to racism, when I checked myself. I reconsidered my behavior after thinking that it would be inconsiderate and tone-deaf not to post about the situation. I knew that I had to be careful and empathetic during this unsettling period in U.S. history.

The pandemic and recession have existed for a few months, while police brutality and racism have been systemic problems. Our global crisis only spotlighted the underlying problems that have always existed but were never given enough attention and action required to solve them. George Floyd’s death marked a tipping point in our society that ignited a fire both figuratively and literally. When people have been suppressed for so long, eventually they retaliate as a means for survival and equality.

These words reflect my assessment of the shortcomings in our society. What we're experiencing today is a combination of multiple environmental, health, and economic factors coming together in one moment marked by death that has pushed us over the edge and forced us to take action.

George Floyd, systemic racism, economic inequality, and the Covid pandemic

George Floyd's death is a symbol of everything wrong with our system.

The recent public outcry about George Floyd's murder has started a united conversation about income equality, racism, and police brutality amidst a pandemic, all of which intersect and perpetuate each other. The economic hardships of the African American community existed pre-Covid, but have worsened as income inequality disproportionally affects them. In 2019, the Federal Reserve found that regardless of our overall economic health, African American's are less likely than Caucasians to pay their monthly bills and the U.S. Census Bureau found that they make 41 percent less than Causasion's. And, making less money has inhibited their ability to save money, invest money, and purchase housing. African American's are 40 percent less likely to own homes than Caucasians, giving them an economic disadvantage and preventing them from living the "American dream" that is part of their social contract as citizens.

As unfair and worse-off African Americans were before Covid, their lives have become ever more difficult right now. "The coronavirus pandemic has laid bare the racial health inequities harming our black communities, exposing the structures, systems, and policies that create social and economic conditions that lead to health disparities, poor health outcomes, and lower life expectancy," reads a statement from the Association of American Medical Colleges. African American's have disproportionally suffered from both more deaths from the virus and higher levels of unemployment.

A big part of the problem is a lack of access to testing, healthcare, and money. A study by the NAACP found that 64 percent are less likely than Caucasians to be offered Covid testing and 60 percent said that they are less likely than Caucasians to have "everything done to save their lives in the hospital". Covid has magnified the systemic inequalities that African American's have endured and those that have died from it are nearly double their share of the entire U.S. population. As of May 11th, 17,155 African American's are known to have died from Covid and about one-fourth said they personally knew someone who had been hospitalized or died as a result of it.

Our economic recession has run in parallel with the Covid pandemic, which has also disproportionally impacted African Americans. As much as the protests are about racism and police brutality, they are fueled by economic inequality that has exacerbated these problems. “So much of this unrest, this civil unrest, is tied to economic inequality," said Mellody Hobson, who sits on the board of both Starbucks and JP Morgan Chase. More than half of the African American adult population was unemployed as of April. And even though the unemployment rate fell to 13.3 percent in May, African American unemployment increased to 16.8 percent (from 16.7 percent in April). They also disproportionately represent essential workers in grocery stores, trucking, drug stores, and social services. All of these essential jobs have a higher likelihood of contracting Covid and typically pay minimum wages, preventing them from collecting unemployment benefits.

The economic suffering doesn't stop there. An entire 70 percent of African American's said they don't have emergency funds to cover three months of expenses, compared to 47 percent of Caucasians, and almost half say they "cannot pay some bills this month" compared to 26 percent of Caucasians. And a recent study by McKinsey found that African American's can expect to earn up to $1 million less than their Caucasian counterparts over their lifetimes and the median white family had more than ten times the wealth of the median black family in 2016.

When you combine the economic hardships together with the pandemics' biological destruction, there's no question that African American's have been unfairly punished and victimized. But, then add police brutality and racism on top of that and you have a recipe for the rebellion we are witnessing today. As Opal Tometi, the co-founder of the Black Lives Matter movement, stated in The New Yorker, "We need the harm to stop in our communities. We need the damage to be repaired. We need to be able to have the opportunity to have a life of dignity, and the possibility to thrive."

They are unfairly treated in our criminal justice system. African Americans are more likely to be stopped by the police, not get fair trials, have longer sentences, and convicted for crimes they didn't commit. An analysis conducted by academic researchers found that African American men face a one in one thousand odds of being killed by the police over the course of their lives, which makes them by far the most at-risk population. African Americans are part of our community so we are responsible for their treatment even if it doesn't affect our daily lives. Their lives matter just as much as ours.

Racial inequality is our collective problem.

The humanization of companies through the activism of their leaders

As a historian of the social media-ization of our society since 2006, I've witnessed the humanization of brands firsthand. I created one of the first social media positions at a Fortune 200 company, where I was managing their social media accounts by acting as a moderator, voice, and curator of information. While I wasn't senior in the company, I was charged with giving voice to a multi-billion dollar brand with a long history. What I learned back then, which is more relevant in today's business world and culture, is that people wanted to interact with companies similar to humans. Companies can't just issue a fluffy press release anymore because their stakeholders want them to speak out about social and political issues they care about.

The issues we face don't disappear when you turn on Zoom for a remote meeting or sit in a cubicle at the office, they are omnipresent.

Every second another company publishes an activist statement denouncing racism and police brutality. Yet, Pepsi board member Darren Walker proclaimed in The New York Times that, "Corporate America has failed black America." The societal and competitive pressures have forced every corporation and leader to speak out because "not saying anything is saying something". But, pay attention to their words and compare them to their actions. Some of the same companies that are taking a stand on racism and inequality are the same ones that have perpetuated the inequality that has disproportionately affected African Americans. In other words, the companies that helped cause the problems that we are facing are the same ones that are coming out against them. These activist statements are being used by some companies as a "smokescreen" to distract the general public from the harm they've caused the very group of people they are standing up for.

L'Oréal Paris is one example of this hypocrisy. Three years ago, they partnered with the London transgender model, DJ, and activist Munroe Bergdorf for a True Match foundation campaign in the UK targeted to minorities. L'Oréal later dropped Bergdorf after speaking out against the white supremacist and neo-Nazi rally in Charlottesville, Virginia. More recently, the company posted on Instagram, "L’Oréal Paris stands in solidarity with the Black community, and against injustice of any kind." Upon discovering this post, Bergdorf retaliated, saying that the brand "threw me to the wolves for speaking out about racism". L'Oréal touts their ethical principles and core values of integrity, respect, courage, and transparency on their website, which aren't compatible with their dismissal of Bergdorf's activism against the same injustice they are posting about today.

As you can see, it's important that we are skeptical of organizations and their leaders because their version of corporate social responsibility might not be aligned to their values and the actions they take.

Companies are either part of the problem or part of the solution, they can't be both especially at a time of civil unrest, inequality, dissatisfaction, and helplessness.

The new age of corporate social responsibility

Corporate social responsibility (CSR) in the age of George Floyd needs to be bolder and there have to be real stakes for it to be fully realized, authentic, and effective. Citizens are more "woke" than ever before and now that everyone has their own platform on social media, the truth will eventually be exposed. While some companies leverage CSR as public relations campaigns to cover up and distract from the harm they are causing, others have taken a stand.

After Facebook employees staged a virtual walkout to protest the company's decision not to take action on controversial posts by our president, Oren Frank, the CEO of online therapy startup Talkspace ended a deal with Facebook citing that they incited "violence, racism, and lies" during the protests for George Floyd. Frank exhibited courage because he was willing to relinquish both revenue and a partnership with one of the most powerful companies in the world in order to uphold his values. Frank's actions are congruent with Talkspace's guiding principles of integrity, justice, and respect for people's rights and dignity. And his display of leadership and courage is rare in our capitalist society but shouldn't go unnoticed.

While Talkspace is a fairly new company, Ben & Jerry's has had a long history of social and political activism since it's founding in 1978. Co-founders Ben Cohen and Jerry Greenfield have both been advocates for racial justice, which is one of the core issues they cite on their website. As evidence to the extent they are willing to uphold their values and beliefs, they were arrested for protesting about money in politics, while simultaneously speaking out in support for the Black Lives Matter movement, all in 2016. Then, last year Ben & Jerry's released a new ice cream flavor called "Justice Remix'd", which is dedicated to criminal justice reform. More recently, the company released a public statement entitled "Silence is NOT an Option", and Cohen followed that call-to-action by protesting near the White House with a sign citing a quote from Ben Franklin that read, "Justice will not be served until those who are unaffected are as outraged as those who are". Ben & Jerry's values are humanized through their founders and then carried out by action, thus reinforcing those values in a credible and powerful way.

CSR has been around for many years but more recently received attention when the Business Roundtable, an association of the most powerful CEOs, declared that companies need to be accountable to all stakeholders instead of solely focusing on profit. This was a marker in history as the old business mantra championed by Milton Friedman decades ago was that earning profit was the "only corporate mandate". On the September 2019 cover of Fortune Magazine it read "Profits and Purpose: Can Big Business Have It Both Ways?" Shark Tank investor Kevin O'Leary, who is worth $400 million, has gone on record to say, "It's not about corporate social responsibility. It's about making money." While there may be truth to that, today's culture demands companies step up to make a difference in order to stay competitive, relevant, and maintain top talent.

O'Leary is correct in saying that profit has to come first because without profit there is no growth or funding for CSR donations and campaigns. But, he's wrong in that driving profit is no longer enough to be sustainable, relevant, and a brand worthy of consideration by employees and consumers alike. CSR is a business strategy because companies don't just support non-profits or causes at random, or shouldn't. These programs help companies manage risk, be a competitive employer, generate PR, and save money. They carry out CSR through charitable giving, being environmentally conscious, practicing ethical labor standards, and making socially conscious investments. None of these strategies, and corresponding tactics, are effective if there are ulterior motivates or the values of the brand aren't aligned with their actions.

"The business of business is improving the state of the world." - Marc Benioff, Chairman & CEO, Salesforce

Marc Benioff, the CEO of Salesforce, has become the poster child for CSR over the past several years, penning an op-ed in the New York Times calling for "a new capitalism— a more fair, equal and sustainable capitalism that actually works for everyone and where businesses, including tech companies, don’t just take from society but truly give back and have a positive impact.” This aspirational statement is reflected in the companies values of trust and equality that are proudly highlighted on their website.

Benioff, whose company generates about $13 billion annually, and with a net worth of about $7.85 billion, appears to be a capitalist with a heart. Upon the passing of Floyd, Benioff issued a saddened message, followed by a live broadcast on "Injustice and Race" that has 5.6 million viewers. His company had temporarily blacked out their Twitter handle on Tuesday to show their support for the African American community as part of #BlackOutTuesday, which I also participated in. In the past, Benioff has championed his "1% Principle" where Salesforce would earmark 1 percent of its equity, products, and employee time for philanthropy. In addition, he was an advocate for Proposition C, a San Francisco ballot measure involving a law that would institute a tax on the city’s largest businesses, with the proceeds going to fund homeless services. All of these actions and words are backed up by Salesforce's corporate values, thus reinforcing their CSR program.

The benefits of doing the right thing

"Doing the right thing is always the right thing." - Gary Vaynerchuk

While simplistic in nature and applicability, this quote by Vaynerchuk serves as an important reminder that kindness and empathy are rooted in human nature. When companies do the right thing by their employees, their employees stay with them longer, serve as ambassadors of the brand, and help recruit on behalf of the brand. When companies do the right thing by their customers, they build loyalty and word-of-mouth that helps the brand grow organically and sustainably. All of this comes down to a set of core values that function as a corporate operating system guiding all decision making.

We are in full alignment when we uphold our values, surround ourselves with people who share those values, and work and buy from companies that exhibit those values.

CSR can have a transformative impact on a company. Research shows that companies that respond to large-scale, diversity-related events, like what we're experiencing right now, can either help employees feel psychologically safe or contribute to racial identity threat and mistrust of institutions of authority. These responses are only authentic and genuine if they reflect your values and are backed up by tangible actions that you can take to solve the problem. Values are at the root of CSR programs, with 89 percent of companies possessing written value statements and nearly 75 percent being under pressure to demonstrate those values.

When it comes to employment, candidates assess corporate culture, purpose, and mission before applying. A study by Glassdoor found 73 percent percent of candidates would not apply to a company unless its values aligned with their own personal values. A separate survey by Cone discovered that 76 percent of Millennials consider a company’s social and environmental commitments when deciding where to work and 64 percent won’t take a job if a potential employer doesn’t have strong CSR practices. Companies that want to compete for, and keep, the best talent strongly have to consider CSR.

But, there's also a correlation between doing good, consumer purchasing behavior and revenue. Three out of every four consumers are likely to shop at companies that support issues they agree with and 68 percent say that the most important attribute of a company is their social responsibility compared to 44 percent who said price. Seventy-one percent of people think it’s important for businesses to take a stance on social movements. Therefore, companies that uphold their values are more likely to generate the profits that their shareholders desire. And consumers can also become employees because people want to work for brands they buy from.

Being socially responsible is now expected from every company and leader.

Business leaders need to be more socially responsible today

CSR can have a transformative impact on your company if your values align with your actions. Don't promote your corporate values of "equality", "diversity" or "inclusivity" when you pay Caucasians more than African Americans for the same jobs, fail to promote African American workers to management roles, or decide not to fund their startups. The average African American-Caucasian wage gap has increased from 21.8 percent in 2000 to 26.5 percent in 2019, yet closing this gap would increase American's GDP by $2 trillion. They comprise only 3 percent of CEOs, 1 percent of CFOs, and 3 percent of division leaders as of this year and fewer than .2 percent of all early-stage venture funding goes to African American women.

Be accountable for your values because your brand depends on them and the world is watching you.

What's good for our society is also good for business. In today's social and political world, where activism is widespread and highly visible both on the streets and in all forms of media, businesses have to take CSR much more seriously. We are all more educated than ever before, with access to a multitude of information in the palms of our hands, so we're watching our leaders, reading their words, and observing their actions.

Remember that you own your behavior AND that behavior impacts others. Uphold your values, take actions that promote those values, and helps us create a better, more ethical, and socially conscious business world.

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