How Companies Can 'Turn Words Into Action' On Racial Equity

This week, our country marked the one-year anniversary of George Floyd’s brutal murder. It has been a year of intense debate, massive public demonstrations and considerable introspection about racial injustice and inequality, focused principally on the need to reform policing and the criminal justice system more broadly. Former President Obama captured both the continued frustrations and hopes of many Americans when he wrote, “When injustice runs deep, progress takes time. But if we can turn words into action and action into meaningful reform, we will, in the words of James Baldwin, ‘cease fleeing from reality and begin to change it.’”

A corresponding and closely related reality is the vast and increasing income inequality in our country, with its especially pernicious effect on Black Americans. In general, income inequality has been rising steadily in the U.S. for the past 50 years. It is higher in the U.S. than in any other developed country—closer to Mexico than to Sweden or Germany. This inequality is widening because most of our considerable economic gains have gone to those already at the top. The pandemic has disproportionately harmed those who are most economically vulnerable and compounded this inequality.

These economic disparities have a disproportionate impact on Black Americans. As Ray Boshara of the St. Louis Federal Reserve Bank and others have documented, these wealth gaps actually have been growing over the last few decades. Between 1992 and 2016, wealth among college-educated white people increased by 96 percent, while Black college graduates saw their wealth fall by 10 percent. In 2016, the net worth of a typical white family was $171,000 – nearly ten times greater than a typical Black family’s net worth of $17,150.

We can see this economic inequality most dramatically at the top. Today there are only five Black CEOs of Fortune 500 companies, down from six in 2012. Throughout our history, there have been fewer than 20 Black men and women running the country’s largest companies. There has been progress in bringing more Black leaders into corporate boardrooms where there are now 322 Black corporate directors in S&P 500 companies. Yet more than a third of these companies still have no Black board members at all. And while many corporate leaders see the glaring absence of Black leaders in the C-suites as a pipeline problem, the news on that front also is not promising. While Black Americans comprise roughly 13 percent of our total population, just 3.3 percent of all executive or senior leadership positions in the largest companies are held by Blacks, a number that has remained static for decades.

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