CEOs: The Black Community Wants You to Be Bold

This article was co-authored by Fiyin Adesina and Sarah Vieux.

Too often, Black Americans do not have a voice in or are not heard by corporate America. Today, there are only three Black CEOs – Craig Arnold of Eaton, Arnold Donald of Carnival, and Kenneth Frazier of Merck – leading the 890 companies we evaluate. While Black Americans comprise an estimated 14% of the total U.S. workforcethese CEOs represent just .003% of the chief executives at the largest, publicly traded U.S. companies – showing that the voices of Black Americans are grossly underrepresented in corporate leadership today.

Each year, JUST Capital surveys the American people to find out what they consider most important when it comes to just business behavior, giving us significant insight into what matters to the American public at large – as well as to the different populations (men and women, high- and low-income, urban and rural) that make up our country. This collection of perspectives together shape the foundation for our Rankings and tools. As Black History Month comes to a close, and as part of our mission to better align corporate practices with the priorities of the public, we are focusing on and striving to amplify the voices of the Black Americans we’ve engaged with over the last year through our polling.

In 2018, of the 9,000 Americans we surveyed, we reached 1,300 Black Americans, who agreed that CEOs of large companies should take a stand on important social issues – in fact, nearly three out of four respondents (73%) want to see CEOs of large companies taking a stand. Americans overall share this view, and look to CEOs to speak out on the issues that matter most – and when we asked them what message they would like to send to CEOs today, they pushed for workers’ rights, non-discrimination, and gender equality, among other key issues.

While Americans expect more of corporate leaders, they are also willing to do their part to incentivize change. Specifically, 83% of Black respondents also believe that people can be effective when they work together to drive change – a testament of faith in the power of the collective. As Americans, how we spend our dollars can provide an outlet for our collective voice and shared views, drawing attention to and driving change on the critical social challenges of our time. Perhaps even more important is where people choose to work.

As part of our survey, we asked Americans to consider how important different workplace topics were to them when accepting a job. In 2018, our Black respondents indicated that, of the issues set forth, the five that matter most when accepting a job, in order of importance, were that companies:

  1. Provide full-time hours for employees who want to work full time.
  2. Provide health care benefits to employees.
  3. Have policies and opportunities for career advancement within the company.
  4. Have non-discrimination and anti-sexual harassment policies in place.
  5. Provide paid parental leave.

With non-discrimination policies one of the key elements Black respondents prioritize when accepting a job, we took a look at how the companies we rank performed on this particular issue. Furthermore, studies like this recent deep dive from Deloitte have shown that, while having Diversity & Inclusion (D&I) policies deliver value, setting concrete targets is crucial because “tangible goals make ambitions real.”

As part of our ranking methodology, we track whether companies have Diversity & Inclusion policies, as well as whether they set concrete D&I targets. Our research has shown that, of the companies we evaluate, six times as many disclose Diversity & Inclusion policies than disclose D&I targets, showing that companies still have a long way to go toward creating tangible, measurable goals.

Deloitte’s study points out that “the setting of specific diversity goals has been found to be one of the most effective methods for increasing the representation of women and other minority groups.” In implementing concrete targets, companies can not only take a stand on an issue of vital importance to the American public, but also improve representation on their teams. Furthermore, our research has shown that companies committed to anti-discrimination – through their policies and targets, along with a lack of fines or controversies around discrimination and equal opportunity – have higher returns on equity (an impressive 21% vs. 14%, respectively over the last five years). This finding is supported by ongoing studies like McKinsey’s Why Diversity Matters, which also demonstrates that diverse workforces perform better financially.

Companies looking to lead today should not only craft a strong Diversity & Inclusion policy, but also set specific goals and targets to incentivize and deliver lasting change. As Peter Drucker said, “You can’t manage what you can’t measure.” Not only do targets show a commitment to doing the right thing, they can drive stronger performance both in the workplace and in the market, building more diverse workforces and improving the bottom line. And once we have greater disclosure around this and other key issues, everyday Americans can together – through their dollars and their job choices – better support the companies striving to do better, and shareholders can reward executives for reaching the targets they set, helping to direct capital toward more just companies.

Celebrated Black writer and activist James Baldwin famously said “Not everything that is faced can be changed, but nothing can be changed until it is faced.” Today, his words ring strong and true, and corporate America would do well to listen. If business leaders can face these challenges with boldness and purpose, companies will not only reap the rewards, but will drive change on some of the issues that matter most to Black Americans.

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