Rev. Dr. Leon H. Sullivan: Black History and Corporate Responsibility

Black History Month provides an opportunity to critically examine, explore, and analyze the unique experiences and contributions of Black people. As a young Black man, Black History is littered with strong role models whose prior activities can positively influence our actions on how to address the present. This year, I committed to learn more about Rev. Dr. Leon H. Sullivan.

In 1977, Dr. Sullivan successfully publicized his Principles of Equal Rights (later known as the Sullivan Principles) and created a coalition of the largest 12 companies in the US. 10 years later, over 125 companies globally subscribed to the Principles. Legislation followed that prohibited US companies from engaging in segregationist practices anywhere in the world while increasing disclosure requirements for certain activities like conflict minerals and labor practices.  

Dr. Sullivan’s Principles shed light on solutions for today’s economic injustices, our country’s growing federal deficit, and corporate responsibility. 

After serving as an assistant minister to Adam Clayton Powell Jr. at Abyssinian Baptist Church, Rev. Dr. Leon H. Sullivan was called to Philadelphia to lead Zion Baptist Church. He garnered national spotlight after the selective patronage campaign in 1958, in which he organized a coalition of over 400 Black Philadelphian ministers to lead the Black community to stop spending money with companies at which they could not gain employment. Rev. Dr. Sullivan was nationally recognized from this effort and was (among other developments) the first African American appointed to the Board of Directors of General Motors (GM), who was at the time the largest corporation in the world. It was here when Rev. Dr. Sullivan formalized the Sullivan Principles, in response to apartheid and US corporate involvement in South Africa.

 “The Principles are rooted in the assertion that when it comes to issues of justice and human rights, the actions of companies can be more powerful than the actions of governments” – Rev. Dr. Leon Sullivan, Moving Mountains. He continued, “Governments need companies to develop their economies, but companies do not necessarily need governments to do business.”

“The Global Sullivan Principles require that multinational companies adhere to basic economic and ethical requirements” – Rev. Dr. Leon H. Sullivan, Moving Mountains. They incorporate equitable hiring, compensation, governance, treatment, housing, and environmental components that promote social, economic, and political justice wherever a company does business. Companies are responsible for economic and social development. This framework was the beginning of corporate social responsibility in the US, in which my firm uses today to evaluate a potential investment in a company.

As of last week, the United States’ largest 8 publicly traded, multi-national companies have over $1.6T (yes, trillion) in stored value on their balance sheets in cash, liquid securities, and retained earnings. I estimate this number is at least 5X when evaluating all US companies.

As McKinsey & Co. has reported, the racial wealth gap has slowed US economic growth and will continue to do so unless addressed. There are many factors as to why wealth injustice exists, which welcomes many solutions to address the larger problem. The solutions lie within the trillions of dollars locked up within corporations, not in programs rolled out by our government. We can look at examples from organizations like DiverseForce, who are training and matching more Black professionals to organizational and corporate Boards of Directors, and Philadelphia Youth Basketball for delivering financial empowerment resources and education to their majority Black audience. As of year end 2020, corporations pledged $35B ($30B coming from JP Morgan Chase) to racial equity causes, which represents just 2% of the $1.7T mentioned earlier. While I expect pledges may continue, it will be upon businesses like Zenith Wealth Partners to ensure wealth is created for communities of color.