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What corporations need to do, internally and externally, to address social equity

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Colleagues meet at a table.

Addressing inequity takes external action, like following through on financial pledges, as well as internal action, like paying attention to wage equity, recruitment and promotions. Getty Images

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The private sector has made various pledges regarding racial and gender equity in recent years and in some cases delivered on them with huge financial donations.

Although that external action is important, it’s also vital that companies direct the same effort inward to address equity internally, according to professor Ella L.J. Bell Smith, at Dartmouth’s Tuck School of Business.

“When we say ‘social justice,’ we often exclude the private sector in that,” Smith said in an interview with “Marketplace Morning Report” host David Brancaccio.

“And when the private sector does get involved, again it goes to the external activity. It does not go to looking at your own corporate house and seeing what we need to do,” Smith added.

Below is an edited transcript of their interview, which focused on how to make companies accountable for their equity goals externally and internally, as well as the kind of measurements that can track the private sector’s involvement in social justice.

David Brancaccio: With the renewed energy in the social justice movement this past year and calls over the last, really, two years by big businesses to rethink what had been their single-minded focus on shareholders. I mean, companies made a lot of promises, right, about diversity, equity and inclusion. You have observed this very carefully for, I will say, a long time. Are companies delivering on these promises?

Ella Bell Smith: I think they are. I think they’re doing it [in] one or two ways. There is the external focus, where companies are distributing funds on social justice activities. From what I can tell, there is internal movement. There seems to be a flurry of new positions in the D&I, the diversity and inclusion space, at the senior level and not being stuck down in human resources. And we’re also seeing promotions on several levels. When Ursula Burns left Xerox as CEO, there were no black women in the Fortune 500 companies as CEOs. We now, I believe, have two. So that is small movement, but movement nonetheless. But there is still so much that needs to be done.

Brancaccio: I can imagine you telling your students you get what you measure. And you mentioned one measure for the external efforts by companies to promote social justice might be, you know, the money they’re spending and venture capital and investments. But what about internal? What are measures you like to watch?

Smith: Who’s in your pipeline and how many people of color in your pipeline are actually slated for senior positions, executive positions? I want to know how you’re developing your people of color. You know, at Tuck, we do a number of executive programs. And I’m always dismayed by the fact that sitting in those classrooms are mostly white men with a smattering of white women, and one or two people of color. What’s important is that not only are people of color in the pipeline, but you’re developing them for these key positions. I want to know how you’re recruiting, where you’re recruiting, what’s your recruiting pipeline? And I want to know about pay equity and wage equity. And are you doing a wage analysis to be sure that everybody is getting equitable pay? And again, it’s done in terms of intersectionality. I need to see that broken down in terms of race and gender for every group. That’s when I know that a company is serious — putting dollars behind their strategic plan, putting people energy into developing their plan. That’s critically important.

Brancaccio: It sounds like you want that plan to be concrete — well expressed, specific, not generalities.

Smith: Not generalities. Not “Well, we have employee resource groups, and we do a lot of activity to make sure everybody’s talking to each other.” We want to know how are you dismantling systematic discrimination and racism in terms of pay, advancement, promotion, in terms of recruitment. That becomes critically important.

Brancaccio: It’s very specific. And you clearly want to see the results of that.

Smith: Right. You want to make sure that companies are accountable. In addition, you want to make sure that the board is discussing this. Your board of directors need to be fully engaged in this topic. It’s not just the executive team, that there is accountability at the top of the house all the way throughout the company.

Brancaccio: And a whole other discussion about how diverse the board itself is, right?

Smith: Very, very true. And we are seeing changes in that. And I’m on LinkedIn, and I’m always happy to see new faces, if you will, who are becoming board members in the various companies. That’s very important because there’s a lot of talent out there who have the experience and the exposure and the history that can serve on boards of directors. And if I can add one more thing, someone on the board needs to be a D&I expert. And by that I mean diversity within the organization. What does it look like? What do the numbers look like? What are the different groups that we need to think about? But once you bring people in from diverse backgrounds, then you need to think about, well, how do we get everybody to play in the sandbox? How do we create equity? Diversity and equity are two different things. And someone on the board of directors needs to have that kind of savvy and that kind of experience, if you will, to represent that voice and to bring that wisdom to the table.

Brancaccio: The book that you wrote with Stella Nkomo came out, I think it’s been 20 years since that hit. It’s called “Our Separate Ways.”

Smith: Yes, yes, yes, I was just a puppy when that book came out.

Brancaccio: Exactly. I don’t think you were allowed to have a driver’s license then, it’s been a while. But it’s called “Our Separate Ways: Black and White Women and the Struggle for Professional Identity.” And, I mean, I don’t want to be the one to point this out, it needs almost no pointing out, there hasn’t been a revolution in this area in the 20 years since that book came out. There’s been incremental movement, I would assume?

Smith: Yes. And it’s been backwards and forwards. You see that for all women, including white women. There has not been the type of advancement that has been needed. And in fact, it got stymied. In the last 10 years or so, it’s really been poor. So when white women are stymied and not being able to advance, black women aren’t even discussed. They’re not even part of the discussion. Because too often when we say “women,” we’re really talking about white women. All the initiatives in the last 10 years around women was primarily focused, as we wrote in our book 20 years ago, around white women. And it’s not just Black women. It’s all women of color, but Black women remain at the bottom of the pecking order, if you will. And we need to change that because Black women are powerful leaders. And you see that in women like [politician and voting rights activist] Stacey Abrams, in our current vice president [Kamala Harris], so why aren’t we positioning them so that they can be powerhouses in the corporate world?

Brancaccio: So the renewed energy in the social justice movement that we’ve seen this year — that has the potential to move the needle on this issue that is so near and dear to your heart and to so many working people. You think the catalyst, you think it actually is serving as a catalyst as we speak?

Smith: I worry about that. Because when we say “social justice,” we often exclude the private sector in that. And when the private sector does get involved, again, it goes to the external activity, it does not go to looking at your own corporate house and seeing what we need to do. A lot of money has been spent on diversity initiatives. But what happens is, companies think that if you check the box, you’re done. The reality of it is, this is a box that needs continual monitoring and continual accountability. And I think companies are now just realizing that. One of the things that I find very ironic, is when I go into a company, where I might have done work on, in this company as a consultant 10 years ago, I’m meeting younger African Americans, both men and women, who are telling me, “Well you know, we’re the first in this company. You know, we’re starting this journey and we’re pushing the corporation forward. We’re pushing our company forward.” The reality of it is no, you’re not first-generation. Ten to 1, you’re third-generation, and your company has had this conversation. The sad news is that your company is still having this conversation.

Brancaccio: And you’re living this additional irony, right? There’s this wonderful news that your book from 20 years ago, with Stella Nkomo, “Our Separate Ways,” is being rereleased. That is rare in the publishing industry, a 20th edition is coming out in early August. But at some level it’s too bad we need to have your book rereleased, right?

Smith: It’s sad. I mean, on one hand, you’re thrilled that this is happening. On the other hand, why do we still need to do this? Why do we still need to have this discussion? How come research that was done 25 years ago is still so relevant today? Why is that the case? I think that’s an important part of the conversation that needs to happen at senior executive levels, that needs to happen in educational institutions, you know, that needs to happen in the not-for-profit side. It needs to happen, quite frankly, on a government level, so that people really understand. Policymakers, we need to do some drastic things in terms of our education and recruitment of people. We just need to understand that what we’re doing currently is not working.

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