Investor Alert

June 9, 2020, 9:22 a.m. EDT

Companies are speaking out against racial injustice after the killing of George Floyd, but they have to back it up with action

Citizens United marked a point where the role of companies in society was elevated, one expert says

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By Tonya Garcia, MarketWatch

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Protesters have made their voices heard on the issue of racial injustice, and now corporations are too.

Protesters and politicians aren’t the only ones making their voices heard on the issue of racial justice in the U.S. following the killing of George Floyd, and many other black citizens, at the hands of the police.

Corporations of all stripes have also been issuing public statements in support of racial equality, a topic that, for a long time, all but a select few would speak on. However, corporate statements could lead to backlash if they aren’t followed by actions that aid progress, experts and activists say.

From the quiet clip from Nike Inc. /zigman2/quotes/203439053/composite NKE +1.64%  , to the email message from Madewell, to the clarion call for an end to white supremacy from Ben & Jerry’s, companies are making more public statements about societal issues, a shift that comes as the result of the increasingly influential place that companies, particularly consumer companies, hold in society.

Robert Foehl, executive-in-residence for business law and ethics in the College of Business at Ohio University, says Citizens United was a significant moment that established companies as members of the American community with a greater responsibility than making sales and driving profits.

Citizens United v. Federal Election Commission was the Supreme Court case decided in January 2010 that gave corporations and other groups license to spend unlimited amounts of money on political elections. The ruling reversed campaign finance restrictions that had been in place for 100 years.

“That was seminal to where we are today,” said Foehl. “What we’re seeing is a more obvious display that corporations are embracing the vital role they play in society. There’s an argument that they’re the most powerful and influential groups in society today.”

For some companies, just making a statement is a big leap forward. And Foehl warns that we should leave room for companies to make missteps along the way.

However, these statements must have action in support of these words.

“Corporations can use their best efforts by engaging with stakeholders; sit down and determine what is the best course of action,” he said. “It might be about committing money and volunteer hours. It could be HR policies to make sure they have appropriate diversity practices and accountability.”

Nike, which has opened itself up for backlash with its continued support of Colin Kaepernick, is one company that many would hold up as an example of a corporation that has risen to the challenges of fighting for racial equality.

But even Nike falls short, says one activist.

“No one should be going to work at a multibillion-dollar corporation and wondering how they’re going to pay their rent,” said Jade Magnus Oggunaike, senior campaign director at racial justice organization Color of Change.

The average salary for a retail sales associate at Nike is $12.12 per hour, according to Indeed.com . On the company’s e-commerce site, there’s a listing for the Air Jordan 6 Retro shoe coming soon with a $190-per-pair price tag.

Diverse workforces at corporations

While many on social media and elsewhere have turned their eye toward the lack of diversity among the upper ranks at companies, Oggunaike says a company must ensure fairness and opportunity throughout the organization.

“Black people in positions of power is a good thing but not the only thing,” she said.

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