The last few months have seen a moment of national reckoning, as Americans confront the racial inequalities that have underpinned society for centuries. And the corporate world is finding that it can no longer stand on the sidelines.
As consumers increasingly expect businesses to take greater responsibility for their impact on society, companies have begun more and more to speak out on a wide range of social, environmental and political issues. As the May 25th murder of George Floyd by police, the latest in a long list of brutalities and injustices perpetrated against the black community, sparked a wave of protests across the U.S. and around the world, many companies took to social media and other platforms to voice their support for the Black Lives Matter movement.
But behind this talk, has there been a real change in business practice? How can we judge if companies are walking the walk when it comes to fighting racial injustice?
Do they recognize the value of diversity at all levels? Many companies promoting messages of racial justice are themselves failing at diversity, especially at the top levels of governance. Among Fortune 500 companies, only five currently have a black chief executive and a 2018 study found that only 16% of board seats were held by directors from any minority group.
This is about more than just optics or box-ticking – research has found that demographically diverse boardrooms and C-suites can enhance a company’s performance by incorporating a broader range of backgrounds, skills and perspectives. They are also more likely to represent the composition of the company’s employees, customers and suppliers, leading to a better understanding of their stakeholders’ values.
Have they changed their recruiting practices? Increasing top-level diversity requires deliberate effort and commitment. Nearly three-quarters of new directors of Fortune 500 companies are sitting or retired CEOs or CFOs, which, given the lack of diversity among executives, perpetuates the current racial imbalances found in the C-suite. A formal search and nominating process, which could include anti-bias training for board members involved in selection, a wider recruitment network to tap a broader range of candidates and a blind review process that removes demographic identifiers, can lead to better board diversity.
Companies should also focus on cultivating and recruiting talent from within their own ranks, hiring and nurturing diverse candidates well before they are viable contenders for board membership. Diversity also begets diversity, meaning that recruiting a wider range of candidates to fill the top spots will come more naturally over time.
Do they prioritize education and mentoring? Retaining a diverse workforce is as important as recruiting one and many minority employees face isolation and discrimination in the workplace, as well as fewer opportunities for career growth. Anti-bias training is already popular among many companies but while it can be a useful way to challenge participants’ views of workplace inclusion, the goal should be to put those ideas into action. Anti-bias training can be supplemented with intervention training, giving employees the tools to confront workplace discrimination when they see it. And learning is an ongoing process that should be reinforced by company values – leaders need to create a safe environment that encourages dialogue, where all employees can speak up, asks questions and be heard.
Likewise, pairing junior colleagues with a more experienced mentor or sponsor can accelerate progress for people of color. Sponsors can not only provide advice and skills training but actively advocate for their protégés with upper management for opportunities to take on great leadership roles.
Are leaders held accountable? If businesses want to show their stakeholders that they mean what they say, leadership must be held to their promises. Leaders should make inclusion a core value of the company and set concrete diversity goals that can be tracked and measured against progress. Some companies have even started tying executive bonuses to these goals, a clear signal to employees that diversity is a value on equal footing with the company’s other core principles and targets.
If businesses are to grow and thrive, now and in the future, it’s essential for companies to value and grow collaboration among diverse voices, and empty promises are not going to get them there. Now is the time for business leaders to act, deliberately and purposefully, to address the relentless undercurrent of discrimination that continues to hinder the success of people of color. It is no longer enough to say the right things; words need to be backed by action. Only then can we make steps towards a more just and equitable world for all.