The Role of Business in Combating Racism: Perception vs. Reality

16 Dec, 2020

IMPACT

The Role of Business in Combating Racism: Perception vs. Reality

December 2020

By Laura Horsley
Senior Director of Marketing and Communications
Public Affairs Council

The murder of George Floyd and ensuing protests over the summer spurred companies and other organizations to take action to address racial justice head-on, often through pledges to change their own corporate culture.

NASCAR banned Confederate flags from its events. Facebook and PepsiCo have pledged to significantly increase the number of Black employees in leadership positions over the next five years. And many companies are involved in community outreach programs, like PayPal’s $500 million fund to support Black- and other minority-owned businesses.

We saw a specific example of how business pushed social change — and surely the protests and general outrage played a part — when the Washington Redskins became the Washington Football Team in July, a move prompted when team sponsor FedEx requested a name change and Nike pulled Redskins merchandise from its site.

As a fan of the team who has watched the name controversy play out for most of my life (we’re going back to the ’70s here), to see such a sudden reversal was stunning because ownership had always been so resolute in its stance. In 2013, owner Dan Snyder famously said he would “NEVER” change the name. Even as a child I recall thinking the nickname seemed offensive and flat-out racist, so I was pleased to see it happen … and also pleased to see the business community driving change.

But it was hardly the first time that corporate America had stepped in to take a stand on an issue of social justice that led to change. Major companies have long supported LGBTQ+ causes, lest we forget the role of Microsoft, Apple, Pfizer and others in fighting the North Carolina “bathroom bill” in 2016, or how many major businesses were giving employment discrimination protections and insurance benefits to LGBTQ+ employees long before the federal government tiptoed into this space.

And while public recognition of these efforts is increasing, it’s not as much as you might think. The Public Affairs Pulse survey conducted by the Public Affairs Council and Morning Consult in late August found just 28% of Americans think major companies are playing a positive role in combating racism, whereas a plurality (38%) don’t think companies are making a difference and 14% say they are playing a negative role.

However, Americans want companies to take a stand. A majority of those polled (51%) said they would have a more favorable opinion of companies that take steps to prevent racism and just 9% said they would have a less favorable opinion.

Dwindling trust in large institutions is certainly part of the reason that Americans don’t think companies are playing a positive role. Forty-seven percent of those polled trust major companies to behave ethically, but nearly as many (46%) do not. The better news for companies is that a majority of Americans (53%) have an overall favorable opinion of them, up from 48% in 2019. That figure is also considerably higher than the 34% favorability ranking of the federal government.

All of this is to say that companies have a ways to go to gain the trust of Americans and demonstrate that they are playing a key role in combating racial discrimination, but they are in a better position to make a dent in public perception than the government. Edelman’s 2020 Trust Barometer also gives business higher trust rankings than the government with a score of 58 (neutral territory) vs. the federal government’s score of 49 (negative territory). And 87% of survey respondents say that “customers, employees, and communities are more important than shareholders to a company’s long-term success.”

My hunch is that public perception of the role of business in combating racial discrimination and taking on other social justice issues will likely improve, but slowly. Four years ago, 27% of Pulse survey respondents said major companies were playing a positive role in fighting racism, just one percentage point lower than the result we found this year. What changed more significantly, however, was the percentage of people who think companies are playing a negative role in combating racism: only 14% in 2020, compared with 24% in 2016.

For corporate America, having fewer people dislike you is not an insignificant finding, even if most of those individuals are shifting to the polling purgatory of “not sure,” “don’t know” or, in this case, “not making any difference,” rather than positive territory.

So what’s next for the Washington Football Team — besides a permanent name at some point? The branding and merchandising boycotts of major sponsors and sports companies ultimately flipped the switch to a name change, but did they flip the culture? That may take a while to know, but signs of change include hiring a law firm to “review … the team’s culture, policies and allegations of workplace misconduct” and hiring Jason Wright as team president. At 38, Wright is the youngest Black team president in the NFL.

With so many companies in the process of making their own culture pivots, perhaps the business community’s leadership on racial justice will become clear and convincing. In the meantime, it’s good to see the commitment toward progress, regardless of perception.

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