“Corporations which do America’s business must be corporations of conscience.”
—Dr. Martin Luther King, Jr.
Introduction
The 2020 killings of George Floyd and Breonna Taylor had a significant impact on a perhaps unexpected segment of American society: corporations. As antiracist protests increased in 2020, many activists demanded that corporations participate in the country’s racial reckoning.
Corporations across the United States sprang into action, embracing the Black Lives Matter (BLM) movement and calling for an end to racial injus-tice.
Amazon was one prominent example. Days after George Floyd’s murder, Amazon tweeted its “solidarity with the Black community—[Amazon’s] employees, customers, and partners—in the fight against systemic racism and injustice.”
It announced a $10 million donation to a group of racial justice organizations, including the NAACP, the National Urban League, and the Thurgood Marshall College Fund.
Amazon also updated Alexa, its virtual technology assistant, to respond favorably to questions about the BLM movement.
The company even appointed its first Black executive after years of criticism concerning the racial and gender homogeneity of its leadership council.
It seemed that Amazon was taking racial equity seriously.
Companies such as Nike,
Walmart,
Apple,
and Delta
made similar pledges. These companies and many others voiced their support for BLM, announced racial equity initiatives, and emphasized their commitments to improving diversity, equity, and inclusion within their companies.
Many corporate leaders called this the dawning of a new era of corporate social responsibility (CSR).
As the phrase implies, CSR is the belief that corporations should pursue goals that benefit society and, in this case, view racial equity and justice as important to their operations, profits, and overarching societal obligations.
CSR advocates believe that corporations have obligations not only to shareholders but to a broad cross section of stakeholders—employees, consumers, and society at large.
The wave of corporate commitments to racial equity seemed to indicate that corporations were viewing their purpose more broadly and that this purpose went beyond profitability.
Now, however, two years removed from the massive racial justice protests that gripped the United States, some corporations have backtracked on their antiracist commitments. Their financial pledges to antiracist causes have gone unfulfilled.
Their promises to diversify their workforces have not been realized.
Other corporate antiracist programs that were priorities in the aftermath of George Floyd’s murder are no longer so.
Those who still believe that CSR can ensure and sustain racial equity efforts are learning a tough and unfortunate lesson. As easily as a corporation might create initiatives that purport to advance racial equity, it can retreat or even end those initiatives just as easily and with no repercussions.
Fleeting corporate commitments to racial equity are nothing new. They are inherent to racial equity strategies that depend on CSR. During the civil rights movement, for example, similar problems emerged as businesses became critical sites for antisegregation protests and demands for CSR. In 1960, a wave of sit-in demonstrations erupted at segregated public accommodations throughout the South.
These protests would change the civil rights movement forever. One of the activists’ core demands was that these segregated businesses act responsibly.
Segregated lunch counters made visible injustice and corporate social irresponsibility—a business’s participation in an immoral and unethical social and legal code.
Civil rights activists initially attempted to persuade individual businesses to end their Jim Crow practices.
Activists appealed to businesses’ CSR, urging them to surpass their legal obligations and desegregate voluntarily because it was the right thing to do.
Socially minded businesses and civic and political leaders also championed CSR as a solution to the racial protests of the early to mid-1960s.
Proponents of CSR asserted that business owners’ voluntary desegregation of public accommodations could end or prevent divisive sit-ins, litigation, and legislative wrangling. CSR, therefore, was framed as a means to meet civil rights activists’ demands while preserving corporate interests and avoiding government interference.
Segregated public accommodations regularly provoked demonstrations and limited businesses’ commerce with patrons of all races.
Voluntary desegregation seemed to offer a progressive, sensible, and potentially profitable approach to the problem of Jim Crow in public accommodations. It could even enhance some businesses’ racial reputation.
Nonetheless, reliance on CSR failed to achieve meaningful desegregation in southern localities. Many white-owned businesses would agree to desegregate during negotiations with civil rights leaders but renege shortly thereafter—or they would simply refuse to desegregate.
CSR, therefore, allowed some white businesses to claim compliance with civil rights ideals without changing significant aspects of their operations, thus becoming a tool that ultimately undermined racial progress. Black activists soon moved away from CSR as a possible path toward desegregation and instead initiated a campaign that led to the enactment of Title II.
Title II profoundly transformed the debate around race and CSR. Most notably, it set a federal floor for racial justice in the area of public accommodations.
After its passage, Black people no longer had to depend on corporate leaders’ hearts and minds to receive service and basic human dignity. The law now guaranteed their civil rights.
This Article uses legal and social history to examine “corporate racial responsibility”
—the engagement of businesses
in racial equity—from a historical and contemporary standpoint. It argues that past and current iterations of corporate racial responsibility present a market-fundamentalist, value-extractive approach to racial equity that reifies existing racial hierarchies and fails to produce change. While the authors believe firmly that businesses have a role to play in achieving racial equity, past and present iterations of corporate racial responsibility do not reflect a meaningful attempt to engage in racial equity.
Rather, corporate racial responsibility prioritizes corporate interests over human dignity, requiring Black and Brown communities to prove their value to the corporate bottom line before being worthy of attention. Further, in privileging a voluntary, market-based approach to corporate racial responsibility, firms stymie racial progress by undercutting regulation that would result in more meaningful change. The sum total of these strategies enacted under the guise of progressivism, therefore, is to exploit the very communities who ought to benefit from corporate racial responsibility.
This Article makes three core contributions.
First, it connects two bodies of literature in a unique way. The first body of scholarship is the civil rights canon. Civil rights scholars have used sit-ins to demonstrate the power of protest on law. They emphasize that civil rights activism created the political environment for Congress to reconsider its abilities to regulate interstate commerce, ensure equal protection, and protect private property rights.
This Article’s reexamination of the sit-in movement innovates civil rights scholarship because it demonstrates CSR’s role in proving the need for legal intervention to guarantee civil rights. These insights challenge civil rights scholars to recognize that civil rights history is part of corporate governance scholarship; such an account expands traditional understandings of the scope of the civil rights movement.
Civil rights activists were not only interested in transforming federal law—they were also challenging and reimagining conceptions of CSR.
The second body of scholarship is robust literature on CSR. Over the past two decades, businesses, investors, and consumers have invested more significantly in CSR and its more commonly known counterpart, “ESG” (environmental, social, and governance).
Yet despite demands for more prosocial corporations, race has not figured prominently in this scholarly literature. Rather, scholars have examined race primarily when discussing corporate board diversity.
Despite these gaps in the extant scholarship, broader societal debates will continue about how corporations can advance racial equity in ways that transcend their (minimal) legal responsibility. There has been some reckoning about race and racism in corporate life; there must also be a reckoning about the neglect of race and racism in corporate governance scholarship. This Article seeks to contribute to that conversation.
Second, this Article engages with current debates on CSR to illustrate that the primary critiques against corporate racial responsibility fail to consider the lessons from the civil rights era and misconstrue corporate engagement’s most pressing shortcomings in racial equity. For example, one of the more strident critiques against corporate racial responsibility is that corporations should not engage with race-related issues because it is beyond the ambit of their proper purpose.
This critique, however, takes a narrow and ahistorical view of corporate engagement in racial issues. Corporations actively participated in the transatlantic trade of Black Africans, profiting from the transportation, sale, and forced labor of enslaved Black people.
Doing so required denying the humanity and dignity of Black people, which corporations (and many white people) were willing to do. This is an early and striking example of business engagement in race-related issues, which shows that corporations have long cared about race, even if the reasons and ways have changed over the centuries.
In more recent history, during the civil rights era, some businesses agreed to desegregate voluntarily to avoid demonstrations and enhance their reputation, but then they often retreated from their pledges to desegregate when they deemed these pledges no longer in their interests.
Likewise, in today’s environment, many corporations have reneged on their racial equity pledges.
This historical continuity reveals that corporate commitments to racial equity are not a modern development in deference to social pressure; rather, corporations typically make, and have historically made, these commitments to further their short-term private interests.
Third, this Article illustrates its thesis by critically assessing corporate racial responsibility. As both past and present developments demonstrate, corporate racial responsibility adopts a market-fundamentalist, value-extractive approach to racial equity that subordinates human dignity to wealth maximization, reifies existing racial hierarchies, and stymies true racial progress. Both the civil rights era and today provide salient examples. During the Title II debates, some political actors argued that voluntary desegregation was sufficient to end Jim Crow.
They cited the incremental steps in some southern localities as proof that federal intervention in the area of civil rights was unnecessary.
In other words, a few businesses’ willingness to engage in voluntary desegregation became a way to undermine civil rights activists’ demands. As a contemporary example, corporations might resist mandatory diversity disclosures on the basis that they already provide that information voluntarily.
Corporate racial responsibility legitimates—at least implicitly—antiregulatory, temporary, and often ad hoc responses to enduring and systemic racial problems. Such an approach is far from racial equity. It often replicates an older, racist, and antidemocratic paradigm whereby the fates of racial minorities are largely in the hands of white corporate elites.
This Article proceeds in four parts. Part I chronicles the major scholarly debates around CSR and corporate purpose. It also begins a racial reckoning in the corporate governance scholarship by detailing how and why scholars should take greater account of race in this literature.
Part II details the corporate racial responsibility debates during the civil rights movement. Activists in cities like Birmingham, Alabama, and Atlanta, Georgia, learned that voluntary desegregation could not end Jim Crow in public accommodations.
Their activism exposed the limits of corporate-led approaches to racial justice, and these experiences ultimately drove them to seek federal civil rights legislation.
Title II, which desegregated public accommodations, proved to be a far more effective and durable remedy for racial discrimination in public accommodations than voluntary desegregation.
Part III analyzes the contemporary debates on corporate racial responsibility, challenging critiques that derive from different—and to some extent, opposed—political stances to show that these critiques ignore the lessons of the civil rights era and miss what is truly problematic about corporate racial responsibility. This Part excavates corporate racial responsibility’s shortcomings, analyzing its market-fundamentalist, antiregulatory features that seek to extract value from the communities corporate racial responsibility is meant to benefit rather than enact meaningful change.
Part IV concludes by applying the lessons learned from civil rights history to the contemporary struggle for racial equity. It offers corporations concrete recommendations so that the recent protests and corporate racial pledges can be more than fleeting moments of racial reckoning. Justice demands far more. If corporations are sincerely committed to ensuring racial equity, they must be honest enough to learn from their past racial shortcomings, bold enough to envision a future beyond mere profit maximization, and committed enough to work for robust, progressive civil rights legislation.