In the wake of nationwide protests against racial inequality along with a reinvigorated presence of the #BlackLivesMatter movement, companies and institutions have been pushing forward initiatives focusing on black and brown integration. The NFL is donating over $40 million to charities tackling social injustice (pun intended), ViacomCBS is donating $5 million to similar causes, and many more donations and gestures are being made to show support for the black community. In 2015, Stephanie McMahon, who is the WWE Chief Brand Officer and daughter of WWE Chairman Vince McMahon, tweeted, “Philanthropy is the future of marketing, it’s the way brands are going to win”. So, is the renewed interest that companies are showing for the black community legitimate signs that they, too, want social reform, or is it just the innovation of marketing?
To offer some context, let us look at China’s CSR initiative.
Corporate Social Responsibility is a way that many privately-owned businesses self-regulate themselves. Lui Baocheng, the founder and Director of the Center for International Business Ethics (CIBE) at the University of International Business and Economics, states that businesses must always assess the Three P’s: People, Planet, and Profit. If companies are properly applying corporate social responsibility practices, they will consider the impact on the citizens and the environment over monetary gains when it comes to new business ventures. Ethics training has become prevalent in Chinese corporations. Over time, as corporations illustrate ethical and social transparency, they are awarded a “Social License to Operate”, which means a high level of support and approval from local unions, stakeholders, and activists.
In America, a sort of CSR movement is underway, but it has taken on a more racially-driven narrative. Corporations nowadays have to appear to be striving for racial equality. The more statements opposing racism they release, the more black and brown people they hire, and the more money they shell out to foundations that combat system racism, the quicker they can obtain their “social license to operate”. Here in the States, though, the social license does not involve unions or stakeholders. It just keeps liberal extremists off their backs for a little while. That social license is also permission to, secretly, keep doing things as they always did. Just look at the NFL’s Rooney Rule.
The Rooney Rule, implemented in 2003, is a policy that requires any NFL organization to interview minority candidates when trying to fill head coaching or senior football operations positions. There has been a minute increase in head coaching diversity over the years, but, unfortunately, the status quo has remained largely unchanged. In 2019, 59% of all NFL players were black and 70% were nonwhite, but only 12.5% of NFL regular-season games were coached by a racially-minority coach. Most coaches and nearly all management and ownership personnel are white. The Rooney Rule has been an exercise of window dressing for the NFL.
A part of battling racial inequality is not just giving more blacks jobs, or promoting more blacks from within, or putting out a press release ending with words “Black Lives Matter”. If true racial equality is desired, then blacks need to have more ownership stake and equity in corporations. Adidas vows to ensure that 30% of all new jobs in the United States are filled by people of color. That will satiate the appetite of many black activists, but would Adidas be willing to offer a piece of the ownership pie to black investors and businesspeople?
Alexis Ohanian, one of the co-founders of Reddit, stepped down from the Board of Directors last week and asked for his replacement to a man or woman of color. In comes Michael Seibel. He is the CEO of Y Combinator and Ohanian’s replacement at Reddit. On the surface, this is a noble move by Ohanian, possibly spurring on more white chairmen to step down at corporations and allow African-Americans and Latinos more higher-end opportunities. If you examine this story closer, however, this appears to be more corporate window dressing.
Reddit has come under some scrutiny recently when the company’s CEO Steve Huffman composed a letter to all of the employees regarding the George Floyd incident and racial issues in America:
“We work for this platform because we care deeply about community and belonging. But community and belonging are not possible without safety from violence, and now is the time to stand in solidarity with the Black members of our communities (locally, at Reddit Inc., on Reddit, and beyond). As Snoos, we do not tolerate hate, racism, and violence, and while we have work to do to fight these on our platform, our values are clear.”
Ellen Pao, former interim CEO at Reddit, criticized the company on Twitter,
With Reddit under racial scrutiny, hiring a black man to its Board of Directors could conceivably mute some potential backlash.
Controversy aside, Alexis Ohanian reportedly did not give up any ownership stake or shares in Reddit to Seibel. Instead, he pledged a $1 million [tax deductible] donation to Colin Kaepernick’s Know Your Rights Camp. All that was accomplished by Ohanian stepping down is that he is no longer in the line of fire the next time Reddit comes under attack for cultivating racial hate speech in America. His influence and income largely remain the same. The hiring of Micheal Seibel was mere window dressing.
The black community, now more than any other time in history, are holding companies and corporations accountable for shifting the racial paradigm. Unfortunately, as long as whites continue to own the major entities, not much will change. Hopefully, the black community will not fall for Corporate America’s window dressing tactics.