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THE BROAD VIEW

Silence on race no longer an option for corporations

All but a half dozen of the 50 largest companies in the US have responded publicly to the recent racial events in the country

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Black Americans, already ravaged by a fatal virus that is two or three times more deadly in their communities, have spread the protests from the streets to social media, contending that corporate silence is the same as complicity.

MTV went dark for eight minutes and 46 seconds. Goldman Sachs pledged US$10 million "to help address racial and economic injustice". And Nike re-worked its well-worn slogan for these troubled times. "For Once", it said, "Don't Do It." Major corporations have moved with unusual speed to position their brands and messaging for America's latest crisis over racism and police brutality. Since May 25, when the death of George Floyd at the hands of white police officers ignited protests across the country, all but a half dozen of the 50 largest companies in the United States have responded publicly to the events.

While their responses have, predictably, varied from business to business and industry to industry, one thing is clear: Silence on race is no longer an option. Many companies worry they will fall out of step with customers and employees if they do not take a public stand.

Yet each social-media post can set off an online skirmish that mimics the battle lines being drawn across the US, as people struggle with rapidly changing events and entrenched fears. Unlike syrupy messages in support of nurses and essential workers fighting the coronavirus pandemic or a call for unity after 9/11, there is no happy medium for a position on white privilege.

"The rule of the day is just do it," Karen Boykin-Towns, senior counsellor at public relations firm Sard Verbinnen & Co said about engaging on the issue. "It's about social responsibility, it's about corporate responsibility."

Black Americans, already ravaged by a fatal virus that is two or three times more deadly in their communities, have spread the protests from the streets to social media, contending that corporate silence is the same as complicity. Their messages have been blasted out under hashtags such as #WeAreDoneDying, urging companies and others to show support for changes.

While Starbucks, JPMorgan Chase and others responded after teenager Michael Brown was shot in 2014 by police in Ferguson, Missouri - sparking protests that spread to other cities - engagement this time has been exponentially bigger. That is partly because the protests have been more widespread, and also because battles over LGBT rights, the polarisation of the Trump presidency and Congressional gridlock on social issues were already pushing businesses to fill the void.

Among the 50 largest US companies, all but Abbott Laboratories, Berkshire Hathaway, Costco Wholesale, Chevron, Exxon Mobil and Nvidia had made some sort of public statement in support of black Americans as at June 3. More than US$1 billion has been pledged to Black Lives Matter, the National Association for the Advancement of Colored People (NAACP), community rebuilding or outreach - and this does not include monetary promises without a set price tag.

Goldman Sachs chief executive officer David Solomon released a transcript on LinkedIn of a May 28 voicemail he sent employees. "I am horrified by continued attacks against the black community, highlighted most recently in the US with the deaths of Ahmaud Arbery and George Floyd, and with what Christian Cooper experienced in Central Park in New York City this past Monday," he said.

On June 3, the company announced the Goldman Sachs Fund for Racial Equity "to support the vital work of leading organisations addressing racial injustice, structural inequity and economic disparity. The fund will be launched with US$10 million from Goldman Sachs Gives, a donor-advised fund that allows the firm and its current and retired senior employees to direct grants to support under-served communities around the world".

ViacomCBS on June 1 turned 10 of its networks - including MTV, Nickelodeon and BET - dark for eight minutes and 46 seconds, matching the amount of time police officer Derek Chauvin kneeled on Mr Floyd's neck. Ice-cream maker Ben & Jerry's said US President Donald Trump must disavow white supremacists and urged government leaders to call for unity, pass new laws to bolster civil rights protections and conduct a federal study on reparations that would close the book on slavery.

Apple CEO Tim Cook called for justice to help Minneapolis heal. Intel pledged US$1 million for social justice causes. Microsoft used its Twitter page to promote perspectives from its black employees. Other organisations have directed contributions to Mr Floyd's family: UnitedHealth Group created an education fund for his children, along with donating US$10 million towards helping the businesses and people of Minneapolis-St Paul. Bank of America's US$1 billion commitment over four years is the biggest pledge to date, with funds going mainly towards communities of colour - those hardest hit by the coronavirus pandemic.

Target - which closed a half-dozen of its hometown Minneapolis stores because of damage and looting - said it will distribute food and other supplies and help local small businesses rebuild through grants from its non-profit foundation. Employees affected by store closures will be paid for as many as 14 days of scheduled shifts.

The reactions played out in fits and starts at some companies. L'Oreal's Maybelline posted support for "inclusivity, equality and justice" and promised donations to the NAACP at 2.01 am, Singapore time on May 30 after a night of unrest that left many US cities smouldering.

Urban Decay, another of the French giant's brands, followed that evening with a message of financial support for Black Lives Matter. It was not until two days later, after nail-care brand Essie put out a morning tweet, that the namesake L'Oreal Paris USA brand posted a corporate message.

A company memo reviewed by Bloomberg showed that L'Oreal USA CEO Stephane Rinderknech let each brand make its own decision about whether to weigh in. Garnier and Giorgio Armani posted black squares for #BlackOutTuesday on social media. As at June 3, Lancome and It Cosmetics - two of L'Oreal's most followed brands on Twitter - did not have a visible statement.

"Some brands may be afraid, but this feels totally different" from the aftermath of other times when black men and women have been killed by police, said Tiffany McGhee, CEO of Momentum Advisors, which follows retail and other consumer-facing companies. Brands that are silent have more at risk than those that weigh in because "people are at home and watching".

The reactions have not all been positive. L'Oreal detractors brought up past complaints about its own racism when it fired a transgender model in 2017 for saying she was tired of the racial violence of white people - "Yes, ALL white people." - on Facebook. Ben & Jerry's faced backlash from some who claimed it was sowing racial divide by calling attention to white supremacy.

PepsiCo's statement on Twitter offering support for George Floyd was deflated somewhat by a social media post that resurfaced a ridicule of a 2017 Kendall Jenner commercial in which the reality star seemingly ends a protest by handing a police officer a Pepsi.

Some companies that want to show their support may have awkward moments if the racial makeup of their c-suite or progress of their corporate culture does not match their aspirations, said Ms Boykin-Towns, who is also vice-chairman of the NAACP board. Nike was criticised for its own employee-relations record and mostly male, white leadership.

That discomfort may mean businesses will want to stay on the sidelines, wary of digging up past controversy, she said. Instead, they should seek partners who can help them craft their response. If they are "sincere and authentic" in outrage and willingness to fix what is wrong within their own companies, "that will be appreciated, that will be rewarded", she said. "There's no hiding, and I think most CEOs see that."

Far fewer CEOs are consistently activist than might be supposed, though, with less than 30 per cent of those at S&P 500 companies and even fewer at smaller businesses taking controversial positions, showed a 2018 Stanford University survey that tried to quantify the risks and rewards of executive activism.

But pressure is growing for them to take a stand amid the likelihood consumers will notice if they do not, said Kim Wright-Violich, a managing partner at consultant Tideline and adviser on the Stanford report - even though it is guaranteed some will be upset regardless of how they act.

"Brands should know that people are watching," said Rashad Robinson, president of Color of Change, the civil rights organisation formed after Hurricane Katrina to advocate for political rights of black Americans. "People are going to hold companies accountable, not just for what they say but for what they do." BLOOMBERG

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