By Tonya Garcia, MarketWatch
These corporate statements of support are “largely symbolic” to Oggunaike, noting the “failures” of governments and corporations with relation to the needs of Black people. Going beyond police brutality, she notes the disproportionate impact that the COVID-19 pandemic has had on the Black community.
“With high unemployment, who has money to spend?” she said, calling for economic justice as well as other forms of equality. “Raise wages for workers. We’re looking at the way people are living in the world and that’s what impacting what’s happening now.”
Consumers are holding companies accountable
In tandem with the growing influence that corporations have is the growing belief among consumers that the companies they do business with should reflect their values. Many consumers see corporations as groups that can step in and address societal issues where other institutions can’t, according to J. Walker Smith, chief knowledge officer of brand and marketing at Kantar.
“They want to see brands do something,” said Smith. “Use their institutional weight and authority to make a contribution to the communities in which they operate.”
Smith notes that when the coronavirus pandemic began, companies quickly turned to action, donating money, making face masks, and taking other measures to help fight the illness.
“You need to think about what your duty is to your stakeholders,” Smith says, noting that stakeholders includes a variety of people and groups with different interests and backgrounds. “Measuring up to the expectations of your stakeholders sometimes takes you to societal issues.”
This may be even more of an imperative for consumer companies that come in close, oftentimes intimate, contact with consumers.
“These are companies that are looking at consumers on a daily basis and they’re trying to understand the full panoply of values and lifestyles that make up people’s lives,” Smith said. “Consumer companies are closer to people than other types of businesses.”
Businesses stepping up
It looks like business leaders are getting the message. For example, Target Corp. /zigman2/quotes/207799045/composite TGT +0.07% has pledged $10 million to civil rights organizations like the National Urban League and 10,000 hours of consulting services to small businesses owned by people of color in the Twin Cities.
And Business Roundtable’s Chairman Doug McMillon, who is also Walmart Inc.’s /zigman2/quotes/207374728/composite WMT +1.48% chief executive, has created a special committee with the goal of finding solutions to the nation’s racial inequality.
The committee includes Mary Barra, chief executive of General Motors Co. /zigman2/quotes/205226835/composite GM +1.86% , Jamie Dimon, chief executive of JPMorgan Chase & Co. /zigman2/quotes/205971034/composite JPM -1.50% and Alex Gorsky, chief Executive of Johnson & Johnson /zigman2/quotes/201724570/composite JNJ -0.25% .
Among the issues these executives plan to tackle are disparities in early childhood and K-12 education, access to capital in minority communities and criminal justice reform.
“We need to remember that free market capitalism has been an unquestionable source of tremendous good for society and humanity,” said Ohio University’s Foehl. “But that doesn’t mean free market capitalism doesn’t have its warts. The idea here is that corporations are engaging in meaningful CSR [corporate social responsibility] programs that help with managing those warts.”
Business Roundtable shocked many last year when it moved away from its shareholder-focused mission and said its statement of purpose should include all stakeholders, including workers.
Now, McMillon said in a statement on behalf of Business Roundtable, there needs to be “real change” on these issues of racial inequality. Walmart announced on Friday that it is committing $100 million over the next five years to address racial equity.
“Business Roundtable CEOs do not have all of the answers,” McMillon said. “But we are committed to doing our part to listen, learn and to use our collective influence and scale to advance racial justice and equal opportunity for all Americans.”