(This opinion piece was published in the Silicon Valley Business Journal on April 1, 2022)
By Farhana Khera
In a matter of just days following Russia’s Feb. 24 invasion of Ukraine, Bay Area companies like Netflix, Airbnb and Uber joined dozens of others announcing their intentions to suspend doing business in Russia.
A month into the war, more than 450 U.S. and western companies have decided that they no longer want to be associated with the repressive Russian regime. But even while we see a number of Silicon Valley and San Francisco companies like Advanced Micro Devices, Fortinet and Upwork withdraw from Russia, others like Apple, Intel and Intuit, seem to be only temporarily suspending operations and preserving the option to return.
Closer to home, companies heard from their own stakeholders demanding change. Take Apple as an example: Earlier this month, a majority of Apple’s shareholders adopted a resolution calling for a civil rights audit of its policies, practices, products and services — the latest of several companies to consider conducting such an audit.
This is the dawn of a new era for corporate America, with rights-focused demands from consumers, employees, investors and governments stronger than ever before. Corporate executives can navigate this new world by acting now to establish and adhere to principles and practices that balance business needs with respect for civil and human rights.
Some Bay Area companies like Airbnb, Levi Strauss & Co. and Salesforce are already leading in this space. They’re making meaningful progress, but more companies need to step up and comprehensive action must be taken to operate successfully in this new era.
Today, U.S. companies are increasingly responding to injustice and inequality and using their economic power to influence movements for civil and human rights. And Silicon Valley companies like Apple, Google and Salesforce are increasingly finding themselves at the center of these efforts.
During the Trump administration, 115 companies joined together and filed an amicus brief with the U.S. Supreme Court challenging former President Trump’s Muslim ban. Tech companies big and small, such as Adobe, Bitly and eBay, were among the signatories. Executives like Google CEO Sundar Pichai and Apple CEO Tim Cook were some of the earliest corporate leaders to condemn the ban.
Amid a long history of inequity and injustice, stakeholders are demanding change in how companies operate with regard to human and civil rights.
After the police murder of George Floyd in 2020, companies stepped up again, pledging to address racial inequity within their companies and in their communities. For example, among the notable Bay Area commitments, PayPal pledged $500 million in investments in Black and Latino financial institutions and venture capital funds. Salesforce pledged an investment of $200 million and one million volunteer hours over five years to address racial equity and injustice.
Investors and consumers want accountability
So, how did we get to this moment where business leaders are heeding human rights and civil rights imperatives? It is a mix of factors. In the case of Russia, companies are navigating a strong, unified sanctions regime coordinated by the United States with its allies. Domestically, companies are responding to specific allegations of discrimination in their products or services. But there are other, emerging reasons for this evolving environment.
Investors and consumers are increasingly voicing concerns over civil and human rights. They want accountability and transparency on issues ranging from pay equity, to diversity, equity and inclusion in staffing and management, to fair and equitable lending practices, to algorithmic and other bias on tech platforms.
After Airbnb and Starbucks conducted independent and transparent audits on the discriminatory impact of their products, services and operations, civil rights organization Color of Change and shareholder advisors SOC Investment Group and Trillium Asset Management urged other companies to do the same. As a result, Citigroup and BlackRock last year agreed to conduct civil rights audits, and a majority of Apple shareholders this month voted in favor of having the company conduct its own civil rights audit.
Perhaps most remarkable in the changing tide is the reputational factor. McDonald’s, Starbucks, Mastercard, Visa and the Big Four accounting firms had been widely, publicly criticized for remaining in Russia. That led to each of them, within hours and days of the criticism, to announce their suspension of operations and services there. For Coca-Cola and Pepsi — the two longtime corporate holdouts in apartheid South Africa three decades ago — this time, they didn’t wait years. They reversed course just days after being publicly rebuked for continuing to operate in Russia.
While a number of Silicon Valley companies were some of the earliest to announce they would suspend business in Russia, others like Spotify were slower to respond. And some, like Meta Platforms that initially only limited Russian advertising, acted only after considerable public outcry and criticism of their continued operations.
Another force pushing these companies are their own employees. Increasingly, a company’s workforce is demanding that companies live their values. For example, former Meta employees have publicly expressed their opposition to the company’s practices and products that have undermined our democracy and harmed the mental health of young people. Current employees continue to protest internally.
At Salesforce in 2018, two senior female executives came forward and encouraged CEO Marc Benioff to evaluate pay equity at the company. That led to the commissioning of an audit and then an overhaul of the company’s compensation structure and system to eliminate gender gaps in pay. Now, Salesforce has set aggressive diversity workforce goals, including seeking to double its number of Black leaders at the vice president or more senior level.
But addressing gender pay gaps and workforce diversity alone are insufficient to address inequality, as Apple recently learned when a majority of its shareholders called for a comprehensive civil rights audit. This review would include not only an examination of hiring and representation of historically underrepresented groups, but the discriminatory impact of its products and services.
Companies need to find a balance
Companies can stay ahead of this wave by taking steps today, beginning with developing and adopting principles that balance their business needs with civil and human rights imperatives to guide their operations, products and services. After establishing these key principles, companies should create performance metrics to hold themselves accountable to these principles and report on progress to key stakeholders.
To do so, companies should hire independent civil rights experts to conduct comprehensive reviews and assist the companies in preparing these policies, metrics and accountability mechanisms. These audits can result in concrete, meaningful plans for corrective action and change.
For example, when guests on Airbnb’s platform complained that they were being rejected by hosts based on their race, Airbnb developed a non-discrimination policy and a set of tools to allow the company to monitor and better understand whether discrimination was continuing to take place. Civil rights audits like at Airbnb were successful because they relied on independent civil rights experts; engaged all key stakeholders, both inside and outside the company; and shared the analysis and recommendations publicly.
Companies that take these steps will be best positioned for the next human rights crisis and, most importantly, can earn goodwill with key stakeholders by actively pursuing equity and nondiscrimination, each and every day. Companies conceived and established in the Bay Area and Silicon Valley have been the engine of our nation’s economy. Now, they can — and should — lead in this new era of balancing business needs with civil and human rights imperatives.
Farhana Khera is a civil rights lawyer and adviser. She is the former founding president and executive director of Muslim Advocates, a national civil rights organization, and former counsel to the U.S. Senate Judiciary Committee.
This article can be found at: https://www.bizjournals.com/sanjose/news/2022/04/01/perspectives-social-justice-corporata-america.html