CEOs are offering plans and investments to address racial inequality after George Floyd death
Demonstrators cross the Brooklyn Bridge on June 4, 2020.
Justin Heiman | Getty Images
Corporate America has joined protesters in condemning the death of George Floyd at the hands of police and calling for action to confront racial injustices and racial inequalities in the United States.
“There are in fact barriers that are faced by African Americans even though we don’t have laws that separate people on the basis of race anymore. We still have customs. We still have beliefs. We still have policies. We have practices that lead to inequity,” Merck CEO Kenneth Frazier said on CNBC’s “Squawk Box.”
Data collected through surveys show how far companies need to come to be representative of the makeup of society at large, and before salaries are comparable across categories like race, ethnicity, gender and sexual orientation.
As a black man leading one of the nation’s biggest companies, Frazier said on June 1, “Businesses have to use every instrument at their disposal to reduce these barriers that existed.”
The shocking video of Floyd laying on the ground during a Memorial Day arrest with a white Minneapolis police officer’s knee on his neck for nearly nine minutes sparked police-reform and anti-racism demonstrations across the nation.
“What the African American community sees in that videotape is that this African American man, who could be me or any other African American man, is being treated as less than human,” Frazier said.
Citigroup Vice Chairman Ray McGuire on “Squawk Box” on June 3 echoed Frazier’s experiences. He said his 7-year-old son asked his wife about the video, saying, “‘Mommy, is he going to do that to me? And Mommy, will he do that to you? Will he do that to Papa?'”
McGuire, who is black and is chairman of Citigroup’s banking, capital markets and advisory business, said Floyd is now part of the “innocent dead, from Emmett Till to Trayvon Martin to Ahmaud Arbery to Breonna Taylor to Eric Garner.”
McGuire said corporate America needs to have courage in the months and years ahead. He said charitable giving and statements alone “do not begin to get to the systemic racism.”
“We need to have the conviction to change the mindset,” he said.
As companies look to be part of the solution, former Xerox CEO Ursula Burns said business leaders can look internally to create change by diversifying their boards and being “affirmative” in their hiring practices.
Burns, the first black female CEO of a Fortune 500 company and now an Uber board member, told CNBC’s “Closing Bell” on June 3: “Businesses leaders have to start to lead. What has happened in the past, they’ve trailed.”
Here are specific plans that U.S. business leaders offered in recent days to address racial inequality in the country.
‘Time to put up the money,’ BofA CEO says
Bank of America CEO Brian Moynihan told CNBC the company was “doubling down” on its work to address racial inequality with a $1 billion commitment over four years to help communities, particularly those that also have been hit hard by the coronavirus pandemic.
“The reason for now is you’re seeing two things come together. One is the long-held issues about opportunity and economic mobility and things that just have to be solved faster in this country,” Moynihan said June 3 on “Squawk Box.” “On the other side, you see a health-care crisis that affects those communities in a more adverse way than it’s affecting the broader society. And we thought, instead of just talking, it’s time to put up the money.”
Moynihan said the new pledge will build off BofA’s existing programs and efforts. He singled out the following areas: health care that focuses on the Covid-19 crisis, housing, job skills and training, and support to minority-owned small businesses.
For example, he noted that the bank already does $5 billion annually in financing for housing in low- and moderate-income communities.
“The difference with this, in housing specifically, is there’s money that’s needed that’s more of the equity, the harder money to find,” Moynihan said. “There’s a large infrastructure that builds housing, developers and other types of things, but the question is where do you get the equity? And sometimes where do you get the seed money and the expertise money? And that’s what we’ll be thinking about in housing.”
‘The Jordan Brand is us, the Black Community’
Charlotte Hornets owner Michael Jordan responds to a question during a 2014 news conference at Time Warner Cable Arena in Charlotte, N.C.
Jeff Siner | Charlotte Observer | Tribune News Service via Getty Images
Michael Jordan and his company, Jordan Brand, have pledged $100 million over the next decade to groups working to end racial inequality.
“The Jordan Brand is us, the Black Community,” the company said. “Until the ingrained racism that allows our country’s institutions to fail is completely eradicated, we will remain committed to protecting and improving the lives of Black people.”
Nike, which produces the Jordan Brand, has also announced a $40 million pledge to support black communities. In a memo to employees promising internal improvement on diversity, CEO John Donahoe said, “Nike needs to be better than society as a whole.”
“While we have made some progress over the past couple of years, we have a long way to go,” he wrote.
PwC U.S. commits to transparency
Tim Ryan, the U.S. chair of financial services giant PwC, told CNBC he’s heard from thousands of employees in the days following Floyd’s death in late May. And employee input is an essential piece of PwC U.S.’s plan to combat racism, Ryan said.
“They want a heck of a lot more than just saying, ‘We condemn the killing of George Floyd or many others,'” Ryan said June 4 on “Closing Bell.”
Among the initial components of the PwC U.S. plan are a two-year fellowship program for some employees to work on policy issues that combat racial injustice and discrimination, and one week of paid time for its 55,000 employees each year to volunteer at nonprofits.
A newly created diversity and inclusion advisory committee will have employees from all levels of the company. The committee will help establish the firm’s larger strategy to combat racial inequality, Ryan said.
Ryan added that PwC is committed to transparency around its diversity goals, sharing annually its progress that will include “the good and the bad and room for improvement.”
The business community and U.S. policymakers will have to work together to address racial inequality, which is part of why the company established its two-year fellowship program, Ryan said.
“I’m proud about how our country is rallying now, but what we really need is a sustainable solution, and that is going to take business and government working together,” he said.
Comcast to put ‘words into … sustainable action,’ CEO says
Brian Roberts, CEO, Comcast
David A. Grogan | CNBC
Comcast, parent company of NBCUniversal, has pledged $100 million over three years to fight injustice and inequality, CEO Brian Roberts wrote this week in an email to employees.
Among Comcast’s plans for the money: grants to organizations such as the Equal Justice Initiative and support to small businesses impacted by the pandemic, especially those owned by people of color.
Internally, Roberts said the company will accelerate efforts on diversity and inclusion that includes bolstering its recruiting strategy.
“While we recognize we don’t have all the answers, we agree it’s time that we start putting our words into real, sustainable action,” Roberts said.
Walmart is seeking ‘lasting change’
Walmart is investing $100 million over five years to create a new center on racial equity, CEO Doug McMillon said Friday on CNBC’s “Squawk Box.” McMillon said the retailer’s work will be concentrated in four areas: financial, health care, criminal justice and education.
“To me, this all boils down to we’ve been wanting to do good work and we’ve been making progress, but we now have this moment here where everyone’s attention is on these issues,” said McMillon, who also is chairman of the Business Roundtable, which advocates for business-friendly policies. “We’d like to surge within Walmart, and more broadly, in a way that results in lasting change.”
McMillon said Walmart will be deploying its $100 million through grants at the community level. Two goals, for example, will be increasing access to capital and education. “We need to do everything we can do to help make the educational system in every community around the country more successful and more effective,” he said.
KFC owner Yum Brands supports Louisville organizations
Stefanie Smith | CNBC
Yum Brands, whose holdings include KFC, Pizza Hut and Taco Bell, pledged $3 million to organizations such as the NAACP Legal Defense Fund and the ACLU, as well as social justice nonprofits in Louisville, Kentucky.
The company is headquartered in Louisville, where 26-year-old black medical worker Breonna Taylor was shot to death in March in her apartment by police executing a no-knock warrant in a drug investigation.
“The last few weeks have taught us that what we, as individuals and a community, choose to do at this time will define the world in which we live,” CEO David Gibbs wrote in a LinkedIn post. Yum Brands, he said, is working to “be a force for positive change.”
J&J pursues ‘a better understanding’ of injustice
Johnson & Johnson had already undertaken a more than $50 million effort to understand the racial disparities in health outcomes that have been crystallized by the Covid-19 outbreak, CEO Alex Gorsky told CNBC on June 3.
And now the pharmaceutical company is adding $10 million over the next three years focused on racial equity, he said on “Squawk Box.” For example, Gorsky said, J&J will be working with the National Museum of African American History and Culture on its educational programs about the history of racism in the U.S.
Gorsky, who is white, said it is important within J&J and the U.S. to “have these discussions and come to a better understanding” of racial injustice in the country. He also urged white men to do “more listening.”
“There’s no way you can just move through a checklist without, I think, demonstrating empathy and an understanding of some of the deep-seated nature and experiences the [black] community has had and is currently experiencing.”
Compass puts diversity standard on advisors
Compass CEO Robert Reffkin told CNBC on Monday that the real estate brokerage is making a commitment that there must be at least one black professional on the teams that are “directly advising” the company.
“Much of the civil unrest that we’re seeing right now is the result of economic inequality, and we can’t expect companies to just be forward thinking and improve the way things are working right now out of the goodness of their heart,” Reffkin said on “Squawk on the Street.” “But we can expect them to do that if their customers ask. At Compass, we work with advisors like bankers, lawyers, accountants, consultants, and we’re their customers.”
Reffkin said Compass is also asking its customers to take steps to fight racial inequality. Its customers, he noted, are real estate agents.
“They’re all small business owners. They generate $90 billion of commissions a year, and they direct $15 billion of spent to other small business owners: photographers, videographers, real estate attorneys, contractors, stagers, inspectors,” he said. “With 15% of the country being black America, we’re encouraging them to spend 15% of their spend on black professionals.”
Reffkin said he and his wife attended recent peaceful protests in New York City, witnessing “a moment for the first time where a diversity of people across professions and skin tone are supporting the black community.”
“I think this is a great time for employees and companies to ask their leadership teams to make a positive impact. It’s for customers to ask the management teams as well as for the boards to ask management teams,” he said. “I’m incredibly positive about this moment, and I think that we’re going to see more support of the black community than any other time in my lifetime.”
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC.