The summer of Black Lives Matter protests responding to the police killings of George Floyd, Breonna Taylor and Rayshard Brooks, among others, has led to stunning commitments from major banks and corporations to commit to social justice and promoting practices to recruit, hire and retain underrepresented populations, including black Americans, Latinx and female colleagues. American Express just announced its pledge to invest $1 Billion to advance racial and gender equity. JP Morgan Chase in October announced a $30 Billion commitment to advance racial equity. Similarly, Citi and Bank of America have each pledged $1 Billion to promote economic mobility among communities of color. Goldman Sachs, famously referred to as a vampire squid during the mortgage crisis in 2008, has announced its "Launch With Goldman Sachs" program "to increase capital and facilitate connections for women, Black, Latinx and other diverse entrepreneurs and investors." These commitments represent huge infusions of capital into causes that these major corporations have just recently found religion upon. Numerous corporations have made recent pledges to financially support social justice and economic equality including Google, Disney, Facebook, Amazon, Cisco, DoorDash, Etsy, Home Depot, Intel, TikTok, Lego, Nike, Proctor & Gamble, Fashion Nova, WeWork, and YouTube, among so many others.
Jamie Dimon, CEO of JP Morgan Chase stated in announcing its $30 billion-over-five-year commitment, that “[s]ystemic racism is a tragic part of America’s history. . . . We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
For those long-time followers of the Corporate Justice Blog, these corporate pronouncements may seem ironic or perhaps will be received with trepidation or doubt. Profit maximization has for years furiously driven corporate leadership to dizzying examples of fraud, corruption, and malfeasance as recorded on these blog pages for years. Still, these Billion dollar commitments respond to a summer of true discontent and protest over inequality and the value of black lives, and if these corporations are to be taken seriously, these capital infusions could come as true gamechangers. Will these corporations truly put their money where their commitments are? And how do we hold these companies accountable to their commitments to advancing racial equality and economic mobility for those communities previously shut out?
photo: Jamie Dimon, Wikimedia Commons
hat tip: Jessica Smith, 3L, Arkansas Little Rock Bowen School of Law
Professor cummings,
ReplyDeleteI am encouraged by these financial investments by major banks and corporations. In particular, it is encouraging that these corporations are responding to social issues that do not directly affect their businesses.
However, I am hesitant to say that these actions show a full commitment by these institutions. While this may sound illogical at first (it is undeniable that $30 Billion is an enormous amount of money), these large banks and corporations are investing with something that they already have a lot of… which is money.
What these corporations in large part do not have, and what (as referenced in a prior Corporate Justice Blog post recently) some large corporations continue to ignore is the lack of underrepresented populations in their own c-suites, or Boards of Directors.
It is far easier for these companies to make a large check out to these organizations and check the box at the next Board meeting that the company is doing its part in a corporate social responsibility sense, rather than implement internal strategies and initiatives to promote underrepresented people into leadership positions of their companies.
As long as these investments by large corporations are solely pecuniary in nature, and not coupled with tangible plans for organizational change, I feel that corporations are not fully embracing the movements that they are advocating for with their company funds. (Again, I will not deny that is hard to argue with $30 Billion.)
-Will McGrath
great comment will. i do not blame you for being dubious. a huge commitment of cash for social justice causes may raise a high profile for a company that is looking for goodwill and positive attention. i actually think that the proof will be in the hard work that these companies must engage if they truly do intend to increase the number of minority citizens that they hire, retain and promote. further, the proof will be in the hard work required for these companies to create programs to infuse capital into communities harmed by racism and discrimination through programs of minority small business loans, and greater economic opportunity. the question that i pose at the close of the post is relevant to this: how do we as the interested public and the investing public hold these companies accountable to their promises?
DeleteLike Will, I am hesitant to place any trust in the motives of these corporations. Some of these same entities are notorious for dodging taxes--if they aren't willing to pay the necessary taxes to contribute to the structure of society, I'm not sure the (comparatively) small amounts they toss to nonprofits are anything more than lip service. I certainly won't complain if those amounts result in needed change, but I am skeptical that the money is backed by anything more than lip service. And as we discussed in class today, there is at least one company referenced in this article that doesn't want to release a report accounting for its lobbying to shareholders. Perhaps I am overly skeptical, but I suspect that some of these corporations put out press releases for their donations to causes they believe will give them positive attention while also donating funds toward candidates and causes that further their own interests, even if that lobbying conflicts with the causes of their publicly announced support.
ReplyDelete--The above comment is from Amanda Wentz, sorry! I selected the wrong profile.
DeleteCultural barriers will always play a role no matter how much money and resources by corporations are spent. For most executive positions and higher compensated positions, there are typically past requirements that need to be met. However, a lot of individuals don't get the opportunity to have those initial requirements that can propel them into higher compensated positions due to their lack of networking and familiarity, which has cultural (which often aligns with racial) barriers. For example, board member positions typically require experience as a board member or CEO of a significant company. The problem is that the positions that lead to being CEO are typically given to a person that has the characteristics of previous members. These characteristics typically have racial elements, which often times these individuals where groomed from a very young age to become a senior manager or board member.
ReplyDeleteI think change needs to happen at corporations not by giving money and resources to black communities but by trying to hire, train, and promote individuals from the black community that can hopefully offset some of the inherent basis in individuals to hire people who they feel have similar qualities. Thanks, Brittaney Akel
Professor cummings,
ReplyDeleteI find myself agreeing with the view of my fellow classmates and find myself being skeptical of these corporations. Although I believe the actions by these corporations are honorable, I do not believe them to be sincere. I believe this summer tensions in America surrounding race placed a great deal of pressure on corporations to be more inclusive. However, as the black lives matters movements have died down all across the country, will corporations continue to strive for corporate justice? Again, I agree with my classmates that while donating money to certain causes will help, radical change needs to happen within the corporations themselves. I predict that within the next coming year many shareholders will propose diversity initiatives. How many of those initiatives do we believe will actually make the proxy card? I just find it hard for people to promote social justice when they themselves have failed to radically diversify their own companies. But you have to start somewhere and maybe this is that somewhere.
-Amanda Williamson
Professor Cummings,
ReplyDeleteI am obviously encouraged by the increase of investment into minority communities. As many have stated and is quite obvious, this significant amount of investment is a step in the right direction. Focusing on the positive, these investments could truly benefit many minority individuals, business, and dreams. This is an investment that is truly unprecedented in both amount and and support.
WIth all of that being said, I will be disappointed if an investment is the only step taken. There is an infinite amount of steps yet to climb. For example, I will be curious to see how these corporations leadership groups, such as Board of Directors, are comprised moving forward? Is there a greater representation of individuals in such positions? In my opinion, it is not enough for these companies to simply invest in these minority opinions, they need to listen to them, work with them, be a part of them, and help them grow. In order to do that, these companies must allow a greater number of minority members contribute to the leadership of the companies. RBG famously said that women should be where decisions are made. That statement is truer today than it ever has been; however, so should members of the minority classes in which these investments are intended to reach.
I don't want to come across too negative. I am very excited and hopeful with the investments being promised. However, this is just but the first step in a long journey that must follow. Hopefully, these companies are will to continue making those steps.
Luke Vance
Professor cummings,
ReplyDeleteSimilar to my classmates' perspective, I am skeptical of the promises made by corporations and how to actually enforce/account for the allocation of funding and structural changes to further the social justice and economic equality mission. I appreciate the effort by the corporations for marketing their commitments to changing this issue among society. It is at least bringing more awareness to the problem.
This is a difficult challenge for Corporate America to attempt to make up for the misgivings of our ancestors in the mistreatment of others while still being fair in determining which applicants are the best fit for job positions.
I am a big advocate of blind panel rating of applications and resumes. This to me, is the closest way that an applicant can be chosen strictly based off of their skills/experience rather than their race, age, or gender. But like all things, there are pros and cons.
I hate that it is on a corporation's shoulders to right this social injustice instead of the main focus being on using proper business operations and efficiency. I hope to one day live in a world where this is no longer an issue.
Only time will tell if corporations will truly embrace this responsibility that has been placed upon them and incorporate structural changes or if it was just a tactic to create a better image for the company.
-Jaci Roberts
It is so hard in 2020, especially in corporate America, to ascertain motives and intent. The concerns of you, and all of my peers above, are completely valid and warranted. However, I think it is so important to remember that we don't want to discourage corporations from engaging in social movement by questioning motives. Until we have reason to believe otherwise, we should be encouraged by the fact that corporations are taking steps in the right directions. However, all of this to say, in both our criticisms and encouragement we need to consistently remind corporations that racial equality and economic movement does not only come in the form of large donations towards social movements, but also in the corporation’s day-to-day operations. We all have so far to go, corporations alike, but I am hopeful for the future.
ReplyDeleteFrances Amick
Like my classmates above, I am both encouraged by and dubious about this news. The billions of dollars being poured out by these corporations may just be a drop in the bucket to them, but money like that does have the very real potential to do a whole lot of good for a whole lot of people, if it is carefully managed, of course. So I hope that these corporations are coming from a genuine, self-reflective place with these commitments, and I remain optimistic that they are. However, I would also like to see them provide more than just this economic support. It would be almost as easy for these corporations to provide basic business resources to, network with, hire, and promote the individuals they say they want to help with their billions of dollars. Such resources and action could be life-changing for the many people who have systemic barriers standing between them and corporate America. As we have discussed all semester, this type of change needs to start at the top, of course. And while fundamental, systematic, organizational change like that may be a big (potentially scary) leap for a corporation to make, it is necessary in order to impact more meaningful change. I also think that such change is what it will take to prove to a lot of skeptics that this is more than just performative activism.
ReplyDeleteI am very skeptical that these corporations are doing anything more than piggybacking off of current events for their own ultimate benefit. As we've all undoubtedly noticed, social causes have become nothing more than a perverse, literal "flavor of the month" for corporations. During Pride Month, many companies' Twitter accounts espouse their alignment with LGBTQ+ causes only to remove them once the month is over and not mention the cause until next year. The same goes for any other cause a company can temporarily get behind to make themselves seem more relatable. All they're trying to do is make people forget, however briefly, that they are a corporate entity that only cares about people as long as you have money to give them.
ReplyDeleteI believe the above mentioned companies do not mean what they are committing to for any other reason than to make themselves look better. That JP Morgan Chase is going to devote funds to helping people open bank accounts sounds like a good starting point, but in the article, it says the people opening them will still have to pay for the account. The fact a million more people will be banked is going to put a lot more money into JP Morgan Chase.
Call me jaded, but I don't trust these companies to have any motive other than their own bottom line. I doubt that will change any time soon. -Chris Brunson
I agree with the skepticism from most of my peers as some of these companies are hypocritical, but I remain hopeful not only because I am an optimist who thinks a single person can alter the course of history (thinking of Martin Luther King, Simon Bolivar, Mahatma Gandhi, Mother Teresa, etc...) but because I believe that social media platforms and even news channels (channels in the way of live streaming people's thoughts without filter or delay) have projected our voices, which in turn allows us to demand more from companies and our government. While not all the voices are heard, at least some are. After all that is how movements like BLM have been able to root, grow, and spread, even internationally at a faster rate.
ReplyDeleteNow, while I believe some things will change, I do not believe that Fortune 500 companies are truly willing to give positions in power to minorities. On the contrary, in my opinion companies that are revenue driven will continue to pray on minorities as they have. After all, it is in their voraciou$ nature.
There are a lot of good points made above. Although I would like to think that these corporations are motivated by genuine self reflection, at the same time--on a purely practical level--their motivation does not dictate the potential benefit of their donations. If these corporations make good on their promises, as the original post says, it is a potential game changer. I suspect, as several others have, that the motives are less altruistic and actually profit driven. After all, corporations buy good will when they make charitable donations, and making a commitment to help eradicate systemic racism is an incredibly effective way to buy good will in the current climate. Good will translates into profits and business longevity. I hope that there is also an altruistic motive involved, but even if there is not, the benefit remains. The key will be holding these corporations accountable for their promises as attention on the social unrest from the summer diminishes. It ought not to diminish, but it inevitably will and even already has. When there is less good will to buy, it will become more obvious whether or which corporations had altruistic motives.
ReplyDeleteShareholders are not in a good position to hold corporation leadership accountable. A derivative lawsuit asking the court to order the corporations to fulfill their promises, arguing that the broken promise will result in good will which will result in diminished profits? Or perhaps an argument that bypasses the profit aspect and argues that corporations are about more than profits? Maybe some interesting litigation will come out of this in the next few years.
Laura O'Hara
These monetary pledges seem like performative activism, designed to increase the reputation of these corporations. The corporations will profit off of these investments in the bump to their reputations.
ReplyDeleteOne way to measure whether these corporations are genuinely invested in advancing racial equity is to look at whether they were concerned about racial issues before it became trendy to support BLM. You could also look at which CEOs are giving their own money to organizations promoting racial equity. In NAACP's 2012 annual report, Bank of America, Wells Fargo, and Walmart are listed as having given over one million dollars to the organization that year. JP Morgan Chase was not listed as having given any amount to the organization.
As early as 2009, The Coca-Cola Company was dedicated to diversity efforts, as evidenced by its 2009 Diversity Report. It listed diversity as one of its core values in that report.
You can also measure whether these corporations are dedicated to BLM or social justice issues generally by looking at their relationships with problematic organizations. For example, JP Morgan Chase just recently ended its relationship with private prisons in 2019 in response to protests. It is long past time for corporations, JP Morgan Chase specifically, to address racial equity issues in tangible ways.
Although it is true, and unfortunate, that "profit maximization has for years furiously driven corporate leadership to dizzying examples of fraud, corruption, and malfeasance", pledges by corporate executives to put capital to work toward racial justice is very encouraging. Despite the fact that corporate boards are driven by maximization of shareholder profit and will, it seems, do anything to achieve that end, Whole Foods CEO John Mackey recently challenged corporate executives to try "leading with love". The second chapter of his book, Conscious Leadership, is entitled "Lead with Love", an idea foreign to most corporate executives. Perhaps we will see the tide turn in the near future toward more people-focused corporations. I hope these pledges are just the beginning.
ReplyDelete- Taylor Mackenzie Mounger
Interesting. I am curious to see if they really will live up to their word. Another article that I read recently stated that corporations that say they believe in "black lives matter" are actually involved in systems that continue to suppress Black Americans. Companies like IBM, Amazon and Microsoft have said that they will not sell their facial recognition technology and other software to law enforcement. Yet, they still are. IBM stills sells predictive police software to police departments, which is against the company's policy that it will divest from racist policing technology. A company can say many things to garner the attention and support of the public but from the inside, they may still be continuing what they say they will not do. One can always hope that they stay true to the commitment they promised. Here is the link to the article: https://www.businessinsider.com/corporations-companies-black-lives-matter-invest-police-racism-inequality-2020-7
ReplyDelete- Deepali Lal
In ways this is encouraging, but I can't help but feel these corporations are riding the coattails of the current social justice movement. I question their sincerity with their other business practices when these large corporations have a propensity to put small businesses out of business. While I do think corporations have a duty to promote social justice in their communities, I don't feel that monetary donations for marketing purposes, or at these "opportune" times will go far to achieve it.
ReplyDelete- Heidi Davis
Accountability is the key here. A lot of promises have been made to support the Black Lives Matter Movement, and to assist in breaking down such a long time and deep-rooted issue of systemic racism in America; but, a re these just minimal gestures to keep everyone invested in these corporations or do Black Lives, and Hispanic, lives, and American Indian lives really matter to these corporations and their leaders? or are these just gestures to appease the people and brush over the deeper issues. When I see monies being put into programs that will help increase the voice, wealth and power of those oppressed by the many systems that we all support and these companies perpetuate; then, I will truly believe that Black Lives, and All lives really matter to corporations and their leaders.
ReplyDeleteIt seemed like a nice gesture by these large corporation at first, but now it just feels like it was a business scheme to not lose money. It is known that African Americans account for a large majority of the consumers in America. When it was a point where tensions were rising this past summer, I think these corporations knew that they either had to issue a statement of support or risk losing profits from the BLM movement... or boycotted in the height of cancel culture. Personally, I would have appreciated the promotion of social justice more if it were actually genuine. Months after the murder of George Floyd and the height of the BLM protest, the same corporations that were issuing statements about equality and social justice reform are now silent once again. https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/
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