A principle isn’t a principle until it costs you something.William Bernbach
It was March, 2017.
On the eve of International Women’s Day, State Street Global Advisors, which manages some $2.5 trillion in assets, indicated its solidarity with the day’s demonstrators. The company installed a roughly 4.3 feet tall bronze statue of a defiant girl in front of Wall Street’s iconic charging-bull statue.
The reaction to the new statue, designed by artist Kristen Visbal, was immediate and powerful. The installation was part of a much broader campaign. “Fearless Girl,” as the statue was renamed, was part of State Street’s campaign to pressure companies to add more women to their boards. The firm followed up the installation with a letter to thousands of companies asking them to take action to increase the diversity on their boards.
In an interview with The Atlantic magazine a few weeks after the installation, Ron O’Hanley, a longtime investment management exec who became the CEO of State Street Global Advisors in 2015, said:
“In our mind, there is incontrovertible evidence about the benefits of diversity. We felt that we needed to be more categorical about that with companies. But we also tend to not like checklists. We like broad principles.”
When the permit allowing the statue to sit on city property expired, the artist argued that her sculpture was about much more than a company’s corporate ambitions. She spoke about the importance of equal pay for women, discussed the fight for women’s rights in developing countries such as Afghanistan and India, and made the pitch that the statue was a symbol of the global women’s movement.
There’s real irony to this.
In September 2017, several months after the statue went up, State Street agreed to pay five million dollars to settle claims by the U.S. Department of Labor that it had systematically discriminated against women and Black employees through unfair pay practices. A headline on CNN read, at the time, “Awkward! Company behind ‘Fearless Girl’ settles gender pay dispute.”
Add to this State Street’s own record on gender diversity — their top executives are 82% men…
Well, not a surprise, frankly.
State Street and the Fearless Girl’s story tells us a lot about the recent race for brands to adopt a brand purpose and the real gap between what they say and the way they really act.
Also, it tells us a lot about how some brands consider their Diversity, Equality and Inclusion policy a Marketing tool, a mere PR technique, instead of a visible sign of standing for social justice and equality.
More dangerously, as the teacher and writer Mark Ritson put it in his column for Marketing Week, “We marketers live in a branding bubble of our own creation. We think brands matter. That our brand matters. We think advertising is important. We think other people care.”
Well, now we know that this is not really the case. And I think that this “branding bubble” has grown up to the point of influencing the whole company’s behavior.
Companies have been climbing over themselves to take a stand and speak out, running all those PR activities that make them feel good about themselves while making no difference to anything or anyone out there in the real world.
And we know why: the business case for diversity, equity, and inclusion (DEI) is stronger than ever. According to a McKinsey study, companies with cultural and ethnic minorities on their teams are 36% more likely to experience industry-leading profitability. Another McKinsey survey shows that more than 80% of Black respondents said they were willing to switch brands if another better represents them.
Moreover, the report found that the greater the representation, the higher the likelihood of outperformance. Companies with more than 30 percent of women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn, these companies were more likely to outperform those with even fewer women executives, or none at all.
In May, America was torn apart by another mass shooting, a horrific, racist murder, in Buffalo. History, unfortunately, repeats itself. The same goes for the reactions of brands. When George Floyd was murdered in 2020, many brands spoke out. Two of the largest brands on the planet, Nike and Adidas, started a Twitter race that ended up with unbelievable empty statements.
While it’s remarkable that two global brands decide to take a position and make statements about racism and the lack of representation that the black community in the US (and people of color in general) face, it should also be apparent that they are not part of the change they are trying to promote.
A quick look at their boards will show the real face of such brands: women and minorities are barely represented. Adidas, for example, was criticized for having only 8% African American VPs (as opposed to 13.6% of the population being the same).
Yes, we are the first to say that correlation doesn’t equal causation; lack of representation doesn’t necessarily prove these companies are racist. But the numbers clearly show that they are not trying enough.
They have a long way to go.
Once again, Mark Ritson put it well in his column on the Marketing Week website: “If you care about black lives, you don’t get inspired by an Instagram post. You get inspired by black faces in the boardroom.”
Words are relevant, but actions are profound. Companies need to become the change they are tweeting about.