“Our work on racial equity is not separate to the vision of our business. It’s actually a part of it.”
—Matthew McCarthy, Chief Executive Officer, Ben & Jerry’s
Capitalism—the economic system that has unleashed unprecedented prosperity principally through its fostering of entrepreneurial innovation—is under question and even under attack. Factors such as crony capitalism and wealth and wage inequality have been undermining its effectiveness and the faith that people have in it. The COVID-19 pandemic has exaggerated the economic issues that directly and disproportionately affect women, people of color, and low- to moderate-income communities.
Providing equal opportunity for all Americans is fundamental to sustaining capitalism. It is a leadership responsibility, a moral obligation, and a business imperative. Americans today are placing their trust in business leaders to deliver the necessary change to provide an equal and level playing field for opportunity and prosperity.
In March 2021, The Conference Board convened CEOs across the corporate landscape in a virtual conference, Building a More Civil & Just Society: Organizational Impact on Social Change Issues, to offer insights and actionable steps to address the challenge of racism, economic opportunity, childhood education, health care, workplace equality, and corporate governance and drive lasting change in their own firms, communities, and society.
The consensus from participants: addressing the fundamental challenge of racism, providing equal opportunity, and building a more just society is not only a social good in itself but an essential part of doing business. It must be an intentional strategy. It isn’t about politics, partisan preferences, or altruism; it is about sustainable business growth, workforce engagement and productivity, customer loyalty, competitive advantage and, most importantly, providing prosperity for all Americans. They believe businesses need to identify a new, better path to move forward in addressing equal opportunity both within the firm and in society while recognizing progress will be a continuous journey requiring courage and persistence.
“When you have that many people who believe that the system isn’t working for them, I think it threatens the very foundation, the pillars of our democracy. Democracy needs to be about rising above your own self-interest.”
—Dan Schulman, Chief Executive Officer, PayPal
Insights for What’s Ahead
The business leaders participating in the conference shared lessons and perspectives they and their organizations have learned as they confront the inequity and injustices in both today’s society and the business environment. Among those insights:
Profit and purpose are not at odds with each other. You drive shareholder value by driving stakeholder value. Large multinational companies such as Procter & Gamble, Newell Brands, Unilever, and PayPal have shown that profits with principles can be a winning strategy if authentic and executed well.
“One of the myths of being a just company or a stakeholder-driven company is that ‘I have to give up performance. You know, this is going to come back to bite me in the markets.’ And we've just found that's not the case.”
—Martin Whittaker, Chief Executive Officer, JUST Capital
Taking a stand does entail risk, but joining and changing the conversation on inequality is becoming an essential part of the relationship with customers and employees. Silence on social issues or simply not responding is a vanishing option—there is no way a major consumer brand can avoid the major controversies underway.The drivers are not politics or partisan preferences but rather workforce, investor, and customer engagement; competitive advantage; and ultimately business growth. There may be backlash, but getting the conversation started creates understanding and empathy. It takes courage and persistence.
“There's a lot of divisiveness on these issues, and we don't have all the answers. And we've got to be okay wading in even though sometimes our point of view may not be fully popular with everybody.”
—Brandee McHale, Head of Community Investing and Development, Citi, and President, Citi Foundation
Set a clear “North Star” to guide your people on the equality journey. Control what you can control—look inside first, then look outward. Start addressing racism and racial and gender underrepresentation by identifying the issues within your own corporate walls through dialogue with employees and leveraging analytics to assess the current state within.
Chose progress over perfection and action over observation. Racial equality, climate change, and equal economic opportunity can sometimes appear as abstract societal issues too large and complex for any one organization to make a difference. It is a journey, and progress both within your organization and in society will be incremental.
Becoming a more socially responsible company requires an intentional strategy that includes setting objectives and metrics and ensuring accountability to meet goals. Behind the words and commitment, you need to have thoughtful plans on how purpose will be governed, executed, and measured.
Make it personal. Look within yourself to drive change. Real progress is only made when a leader says: “I am going to make a difference.” Leadership and personal commitment matter, and change starts with the leaders themselves and their ability to communicate purpose with passion and authenticity, which can drive meaningful behavioral changes
“It starts with the individual. I think one of the things you’ve got to ask yourself is: What are the personal behaviors that you think you need to change? In your business life and personal life, have you tolerated prejudice and bias? Look at yourself, within yourself. You can drive tremendous change. And don’t wait for someone else to do it. You’ve got to do it.”
—Ken Chenault, Chairman and Managing Director, General Catalyst, and former Chief Executive and Chairman, American Express
Listening is the first—and sometimes the hardest—step to begin building the foundation of a more just organization. Business leaders know uncomfortable conversations are hard, but uncomfortable listening can be even harder. Don’t assume you know what the issues are; rather, go out and talk to and listen to stakeholders.
Embrace new partnerships and ways to collaborate. Sometimes nontraditional partners provide the best ideas and courses of action. External collaborations strengthen the company brand and connection to the community while also building a future talent pipeline. Partnerships between competitors, industry sectors, big and small firms, government, academia, customers, and communities can create a business and social ecosystem that drives outcomes that far exceed the scope of what any single organization can achieve.
Conference participants believe that committing to a more civil and just society that provides equal opportunity is an economic and social imperative. But progress can only be accomplished if businesses see part of their mission as contributing to the overarching health of their communities. It is about allowing society and communities to thrive so businesses can thrive, too.
