Business leaders agree: The private sector plays a significant role in urban governance, and now more than ever, it is imperative that companies invest in the communities that they serve.
That’s according to three experts — two banking executives and the president of a nonpartisan civil rights organization — who spoke at a panel today at The Conference Board’s “Building a More Civil & Just Society” conference. National Urban League president and CEO Marc Morial; Wells Fargo SVP and head of external relations Gigi Dixon; and JPMorgan Chase managing director Sekou Kaalund came together for a conversation on corporate America’s role in providing greater access to housing, capital for small businesses, employment for minorities and more.
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Here, a snapshot of their insights on how companies can help drive economic opportunities — and do so effectively.
Start within your own workforce
Over the past few years, especially during last year’s national racial equality uprising, an increasing number of companies have pledged donations and doubled down on trainings aimed at promoting diversity and inclusion in the workplace. But, according to experts, in order to resonate with their communities, corporations should recognize that real change should start within companies’ own rank and file. That is, it may be more important for companies to clean up their own homes before they forge ahead with the goal of driving sweeping change within external communities.
If nothing else, it is important that external efforts are aligned with internal investment so all major initiatives at the company are holistic and authentic. That means providing ample resources and opportunities for people of color, as well as keeping Black, Latinx and other minority employees in mind when looking to fill a seat at the C-suite table.
“It’s important for corporations to mirror the market. The market is changing. The demographics and shifting in America,” Dixon said. “Now, we’re in a situation where our environment really amplifies the disparities that we see inside of companies, outside of companies and across our communities.”
Kaalund added, “The ability for a corporation to be successful in the future without tapping into a wide array of diverse talent is very small … The ultimate viability of a company is going to be impacted by whether it’s really attracted the best talent, and if the company is not upholding responsibilities for the communities it serves, they’re not going to attract these Gen Z and millennials [and other talent]. So now you have two challenges: You can’t attract the talent, and you don’t have the best ideas at the table”
Factor in the impact of the pandemic
According to the Center for Global Policy Solutions, if people of color had similar business ownership rates as white entrepreneurs, it would result in 9 million more jobs and $300 billion more in worker income. That statistic was shared just before the COVID-19 pandemic, which has disproportionately impacted minorities as well as low- to moderate-income communities — particularly with regard to economic issues like pay equity, housing costs, healthcare resources and more.
The health crisis has also been damaging for small businesses, many of which are still struggling to obtain capital to simply stay afloat, while many bigger white-owned and -led companies have had the resources to remain successful or, at the very least, stay agile amid the turbulence. In fact, it’s businesses with non-white owners that are closing at faster rates, explained Dixon, who added that access to financing continues to be a “steep hurdle” for small business owners of color.
This presents an opportunity for corporations that are able to provide financial assistance to do so, whether by offering resources to small businesses or donating to nonprofits aimed at supporting marginalized communities. Amazon, for instance, announced that it has invested more than $30 billion over the past couple years in logistics, tools, services and programs for small and medium-sized businesses, which represent more than 50% of all units sold on its site. It has also forged partnerships with the Department of Commerce’s Minority Business Development Agency and the National Business League to help Black-owned businesses grow by selling through its marketplace.
“When our communities are thriving, then our companies can thrive and grow,” Dixon said. “It’s 360 degrees of impact.”
Morial added, “We’re not talking about charity here; we’re talking about responsible corporate activity that’s tied to the mission, but also tied to being responsible to the communities and the nation where you serve and work and undertake your efforts.”
Keep track of your goals
Just over a year and a half ago, more than 180 CEOs at some of the largest and most recognized U.S. corporations — counting Macy’s, Target and Walmart — announced that they were updating the Business Roundtable’s corporate governance principles, which has served as a guideline on “the purpose of a corporation” for more than four decades.
According to the group, the new standard for corporate responsibility is no longer based on shareholder value alone, which has served as the central tenet in each statement issued since 1997. Instead, executives said they would conduct business for the benefit of all stakeholders — not only generating long-term profits for shareholders, but also dealing fairly with suppliers, investing in employees, supporting communities and delivering value for customers.
As for whether companies will be able to uphold those ambitious pledges, some experts say it remains to be seen. “In the George Floyd era, we’ve seen a number of commitments. I want to be able to come back in two years or four years, look at those commitments and say those commitments have been [fulfilled],” Morial said.
He added, “This has been 400 years in the making. We’re not going to fix it in four months, 40 months, four years. This elevation, this change, has to be consistent.”