Companies Lagging on Racial Justice Could Find Themselves Canceled

Among the laundry list of topics covered during this week’s virtual Davos Agenda is the role business can have in ensuring racial justice worldwide. The events of the past several weeks show that society is still far from a true reckoning on race — and whatever one may think about the folks who usually fly into Davos for the World Economic Forum annual meeting this time of year, it's clear business has a role to play in creating a more level playing field. 

True, the U.S. Capitol riots served to shine more ugly light on the reality of racial injustice here in the U.S., but race relations are a thorny challenge across the pond as well. To that end, the World Economic Forum (WEF) launched an initiative that aims to push companies and their leaders to make an effort both individually and collectively to ensure workplaces that are fair, welcoming, and actually hire professionals with historically underrepresented racial and ethnic backgrounds.

A plan to address racial justice

According to the WEF, such an approach requires a focus on three areas. First, fair and equitable opportunities must be available in the first place. Next, companies need to look outward and they must ensure this inclusive mindset applies to its products, customers and supply chain.

Finally, businesses, along with their leaders and employees, have got to engage with their local communities — and pursue public advocacy, not shy away from it. Bottom line: If a company’s employees can coalesce and pressure a state or local government to pass laws that curtail any form of discrimination, that’s a positive for both business and society.

WEF notes that such programs need to be “hardwired” into a company’s processes and culture — not be treated as temporary public relations talking points. For example, a beverage company that collected demographic data on hiring decisions while embarking on a diversity plan saw the percentage of its Black executives increase tenfold during a 12-year period. But once that same company ended its public disclosure of such data, the percentage of Black executives within its ranks began to decline.

Public statements aren’t enough to achieve an equitable society

Further, despite the billions of dollars corporations have funneled into racial justice initiatives since last summer, deeds still haven’t met words or financial largess. Critics have noted that some of these companies still send financial contributions to politicians who have demonized the Black Lives Matter movement. Meanwhile, many corporations have still made little progress on the inclusion front. The public statements and gestures may have been bold, but WEF notes:

“Companies have been repeatedly reckoning with the gap between intentions and progress. There have only been 15 Black CEOs over the course of the 62 years of the Fortune 500’s existence, and currently, only 1 percent of Fortune 500 CEOs are Black. There are no Black female CEOs of the Fortune 500 and only three women of color.”

Cancel culture is ongoing for a reason

Another risk for companies is that, as they keep proclaiming their diversity chops publicly on such forums as social media, there is the chance their reputations will take a hit if they aren't walking the walk. For better or worse, social media can fan the flames of so-called “cancel culture.” While it may seem unfair that one off-putting comment should plunge any organization in hot water, the evidence also suggests many of these episodes were not “random flukes,” but in fact, “smoldering problems” that could have been prevented if management had been more proactive and intentional about diversity, inclusion and racial justice.

On that point, new Porter Novelli research that examined cancel culture across the U.S. business landscape proves that consumers have found their voices through social media and won’t give them up any time soon. Of all the factors that would push American consumers to cancel a brand, the largest offense a company could commit would be when addressing racial issues — narrowly edging out women’s rights and COVID-19 protocols.

The good news for companies? Consumers see their cancel culture voices as a tool to keep businesses accountable for their actions, engage them in dialogue and improve their performance on social issues for the long term. Forgiveness is possible, depending on how a company seeks to earn it.

But here’s the bad news: 37 percent of surveyed consumers indicated that an offensive incident would push them away from a brand for at least a year or they’d never support that company again.

Some companies that found themselves in the midst of social media firestorms, such as Oreo cookies or L'Oréal, were by and large able to weather those storms. Others, including Wells Fargo and Goya, are still struggling to change their perceptions for the better.

The lesson here for brands is that if you don’t want to be in the crosshairs of the racial justice debate, it behooves your organization to enact measurable, transparent and lasting change now. Relying on boilerplate language in your press releases and on your website may give an appearance that your company may look like 2021 America, but under scrutiny, it can't mask the reality that your company culture is more reflective of what this nation was like back in 1950.

Image credit: James Eades/Unsplash