Companies must do more than just tweet their opposition to racism

Lots of companies have been making statements, Disney even made a $5m donation. But actions speak louder than words when it comes to tackling institutionally racist labour markets, writes James Moore

Anti-racism protests have taken place across the world (Rex Features)

Statements opposing racism by big corporations have become almost as ubiquitous as celebrity endorsements over the last couple of weeks. Some companies have even gone as far as making donations to causes promoting social justice.

“This time it’s different,” is a phrase oft heard. And I suppose it is, in that during previous outpourings after the killings of unarmed black people by police, they mostly kept quiet and kept their hands in their pockets.

But how meaningful are the gestures they’ve made?

Take Disney, one of the world’s biggest and most high profile companies, which both issued a statement and put its hands in its corporate pocket.

One headline I read opined that “Disney is donating a ton of money toward social justice”.

And $5m (£3.9m), of which $2m was earmarked for America’s NAACP, looks like a big number.

The NAACP and the other organisations to benefit will surely make good use of the funds, which are welcome.

But a bit of perspective. Disney generated $69.57bn of revenues in 2019. The donation amounts to less than 0.0001 per cent of that. It turns over more in any given hour. It spent 10 times more on boss Bob Iger’s compensation in 2019.

So it’s not a “a tonne of money” by Disney standards.

As for the statement, which read: “We stand against racism. We stand for inclusion” etc. I would refer you to Disney’s board and its directors and officers. You can check out their biographies on its corporate website. There is just one African American among the 10 directors, none among the 15 executives.

At this point the phrase “actions speak louder than words” springs to mind.

When it comes to actions there are things Disney, and all the corporates from which pretty words have spilled in recent days, could do.

The first would be to raise the wages of their lowest paid employees.

Looking at the situation in Britain, the TUC in a piece of research published last year, said black and minority ethnic (Bame) workers faced a double hit from unemployment and low pay thanks to institutional racism in the jobs market.

So addressing the issue of low pay would serve as a good, economically empowering first step. That it would have benefits across economically disempowered communities is a bonus.

A second, and related, step would be for companies to commit to reducing their dependence on casual labour, and reduce economic insecurity through so doing.

The same piece of research found Bame workers were more than twice as likely to be stuck on agency contracts. It also found that 1 in 24 Bame workers were on zero-hours contracts, compared to 1 in 42 white workers.

Next, companies could make a serious commitment to look at what prevents non white employees from gaining promotions and climbing the corporate latter, or simply just staying in post. In short, they should conduct diversity audits.

Another piece TUC research I’ve covered found that the level of pay inequality facing black employees in Britain rises based on the qualifications they have.

In researching the piece, I was also told that Bame employees are less likely to remain with large organisations, offering higher salaries, especially at the top end. Why? What needs to happen to change that? These are questions that demand answers.

Large corporations have the resources to find them. They should do so. Progress reports to shareholders should feature in their annual reports.

Shareholders ought to have an interest in this: diverse companies tend to be more successful companies.

Back in 2015, management consultant McKinsey found that companies in the top quartile for ethnic diversity were 33 per cent more likely to have “industry leading profitability”.

Another worthwhile idea would be to report on their Bame pay gaps.

Amazon is among dozens of multinationals to have tweeted committing to solidarity with the Black community (Twitter • Amazon)

The British government held a consultation on making this mandatory as a follow up to the gender pay gap reporting regime. The regressive and illiberal government of Boris Johnson seems to kicked it into the weeds of Whitehall where good ideas go to die.

Were sufficient numbers of large companies to move themselves on their own, it might serve to shame it and others into action.

Much of the work I’ve suggested is likely to prove challenging, and maybe expensive. But McKinsey’s research suggests that it would pay for itself.

It would certainly serve as a more meaningful demonstration of a commitment to inclusion, anti racism, equality, and equality of opportunity, than a tweet, or even a chunky donation to a worthy cause.

Of course, rather than listening to me, big companies could do worse than listening to their own Bame staff members, and former staff members, who might have more and better ideas than I have.