By Lydia Kuykendal, Director of Shareholder Advocacy, 
Mercy Investment Services, Inc.

The COVID-19 pandemic has exacerbated the disparities for people of color in areas such as vaccine access and health care. Over the past two years, shareholders have expanded their corporate engagements addressing systemic racism. 

This movement began as a result of the murders of George Floyd and other people of color at the hands of police. Many companies have since made pledges to address systemic racism. However, more than one year after these commitments were made, the practical outcomes remain unclear.

This year, shareholders have filed a slate of resolutions calling on multiple companies to conduct third-party racial equity audits. These internal audits evaluate how a company’s policies and practices discriminate against or disparately impact communities of color. 

Shareholders have called on companies to identify and recommend steps to eliminate any business activities that “further systemic racism, threaten civil rights, or present barriers to diversity, equity and inclusion (DEI).” Shareholders also believe workers, customers, community members, and other stakeholders should inform the audit and the report.

Shareholders have also seen racial disparities between hourly and salaried employees in some companies, where salaried employees are predominately white and hourly employees are majority people of color. This disparity signals that people of color may not have the same opportunity for advancement to better paying, senior-level jobs. 

In 2020, partners at the Interfaith Center on Corporate Responsibility (ICCR) filed 12 resolutions calling for racial equity audits. Resolutions were withdrawn at BlackRock, CoreCivic, Morgan Stanley and Amgen based on their commitments to conduct internal audits. The Adrian Dominican Sisters’ Portfolio Advisory Board (PAB) is looking forward to reviewing the audits as they’re completed. 

This year, the PAB filed a resolution at Tyson Foods. It was recently withdrawn after the company agreed to conduct an independent third-party audit that will include stakeholder interviews and investor feedback. Shareholders filed the resolution at Tyson due to the significant impacts of COVID-19 on its workers of color. 

The racial disparities often extend to company boards of directors. For 10 years, the Thirty Percent Coalition has advocated for diversity on corporate boards and company leadership that reflects the gender, racial and ethnic diversity of the United States. We believe that diverse leadership and boards lead to better experiences for employees and shareholders and improved company performance.  

To combat systemic racism, corporations should recognize and remedy industry and company-specific barriers to everyone’s full inclusion in societal and economic participation. The recent Racial Equity Audit proposals, as well as ongoing dialogues that elevate awareness of business models that perpetuate systemic racism, will further the longtime work of the Adrian Dominican Sisters and other investors to create an anti-racist society.