George Floyd 's murder forced executives to address racial injustice and double down on diversity.- CEOs of JPMorgan Chase, Chipotle, and SurveyMonkey agree their roles have changed.
- Floyd's legacy accelerated the move toward stakeholder capitalism.
While out on a road trip with her 23-year-old daughter in April, Lisa Ross squeezed the steering wheel as she listened to a radio station report on Derek Chauvin being tried for the murder of George Floyd. When prosecutors played an audio clip of Floyd's final words, "I can't breathe," she screamed in agony.
Ross, the US CEO and highest-ranking Black woman at the public-relations giant Edelman, felt Floyd's pain was her own. With the help of her daughter, Ross was able to calm down, but in that moment, she knew Floyd's death - and Chauvin's verdict - would have significant implications on her role as an executive at work.
"I was screaming," Ross told Insider, "because my brothers and father look like George Floyd."
Floyd's death was a breaking point for millions of people around the globe, a decades-long culmination of unchecked police brutality and racial injustice. Business leaders were then pressured to respond quickly and decisively, reprioritizing their obligations to the employees and communities they serve. It was a massive, public, and nationwide shift toward society as a whole, not just shareholders.
Despite some resistance from Republican politicians and constituents, Floyd's legacy continues to expand the role of CEO to include addressing pervasive social ills by raising wages, investing in underserved communities, and hiring and promoting more people from marginalized backgrounds, multiple experts said.
For Jamie Dimon, CEO of JPMorgan Chase, Floyd's murder was a turning point for the financial firm.
"Watching the events unfold after George Floyd's murder, we understood that we, as a company, could do more to serve and lead," Dimon told Insider in an exclusive statement. "It was a moment when many companies had to decide or recommit to what they stood for."
Shortly after Floyd's death, JPMorgan pledged more than $30 billion to promote racial justice, the biggest single investment of a US company toward racial equity in the past year.
"Now, more than ever, we are working to make inclusivity and equity a central part of everything we do," Dimon said.
Other companies like Citi, Mastercard, and Apple committed large investments. Companies withdrew millions in ads from Facebook to pressure the social-media giant to stop the spread of racist content. Chipotle and Starbucks tied executive compensation to meeting diversity, equity, and inclusion targets. Business leaders hired DEI consultants at record rates.
In the past year, Ross has urged hiring managers at Edelman to be more inclusive in their recruiting. Since May 2020, 48% of senior hires at the firm have been women or people of color. Ross also created a task force to help some 200 new corporate clients craft meaningful pledges to advance racial equity.
"I was like a dog with a bone," Ross, who oversees thousands of employees, said. "Nothing and no one could stop me."
Zander Lurie, CEO of SurveyMonkey, said he, too, felt his role quickly evolved after Floyd died.
"Before George Floyd's death, we cared a lot about DEI, but not on the same pedestal as our product and sales goals," Lurie, who's white, told Insider. "Now we're more fearless about stating that we believe world-class execution in the DEI arena is as important as the products we ship and the revenue targets we set."
When it comes to racial justice, workers, customers, and investors are holding CEOs to higher standards. They want them to be leaders in not just the business world, but also in society.
"I almost feel bad for these guys. They're grappling with their role," Ross said. "Things are different."
American capitalism transformed
About one year before Floyd's death, the role of the CEO had already begun to change. In 2019, JPMorgan's Dimon, along with 180 other business executives, published a public letter that called for a departure from shareholder primacy, the notion championed by economist Milton Friedman in the 1970s that the sole purpose of a company is to drive profits for shareholders. The theory held sway over business for decades, resulting in business leaders chasing profits and cost-cutting measures above all else.
The letter signified that top CEOs were growing distant from Friedman's philosophies. Rising pollution levels and a widening class gap have increased the stakes affecting their businesses.
The 2019 letter essentially told Americans that CEOs were going to double down on these issues. Floyd's death in 2020, along with the pandemic, were the first major tests, according to Just Capital, a nonprofit research firm.
"It was a turning point," Yusuf George, a managing director of corporate engagement at Just Capital who is Black, said. "It accelerated the move toward stakeholder capitalism."
The growth in environmental, social, and governance investments and projects over the past year shows a shift in shareholder values.
This spring, there were more than 300 ESG proposals for shareholders to vote on. One group of investors representing more than $1.2 trillion in assets made headlines in April asking banks to conduct a third-party audit of their racial-equity plans.
"Investors are pushing for more transparency," George said. "CEOs need to be bold in the initiatives they're launching."
Workers are speaking out in droves
The video of Floyd's death shook many business leaders and workers to their core.
"When I saw the video, I was shocked, disturbed, and disappointed by what I witnessed," Chipotle CEO Brian Niccol, who is white, said. "It was, and still is, a tough video to watch."
It compelled millions across the world to protest racism and police brutality. And people didn't want statements. They wanted action.
A 2020 survey by The Harris Poll and Just Capital found that more than 60% of the 2,000 participants wanted leaders to promote diversity and inclusion within their companies.
Chipotle's Niccol said he took more time to connect with workers. He said he spent the next year listening to Black and brown employees in a series of conversations and panel events, a good first step, according to DEI experts. He also tied executive compensation to DEI goals.
"I spent a lot of time listening," SurveyMonkey's Lurie said. "That's one of the most important things leaders can do today."
Tiffany Jana, a DEI strategist who works with Fortune 500 companies, said demand for their services increased exponentially in the weeks after Floyd's murder. Mandy Price, CEO and cofounder of Kanarys, a DEI technology platform, said her phone was ringing constantly with new inquiries.
"Before Floyd's tragic death, many CEOs saw DEI as a nice to have, not a need to have," but that's no longer the case, Price said.
One of the first actions Lurie took last summer was hiring a chief diversity and social impact officer who reports directly to him. He also organized multiple meetings in which Black and brown employees shared their experiences with racism in order to create a more inclusive culture.
The company issued a bonus policy for ERG group leaders, raised more than $300,000 for Black-run nonprofits, and committed to increasing the number of Black-owned businesses it works with. By 2024, the company wants its workforce to include 48% women, 22% from underrepresented minorities, and 4% nonbinary.
The long road ahead
Jose Minaya, CEO of Nuveen, TIAA's investment manager, said Floyd's death stirred a mix of emotions for him. "It made me angry, confused. I was trying to understand, how does this happen?" Minaya, who is Latino, said. "After it was playing out, and seeing the reactions of people speaking out, I also felt optimistic. Because some of the right conversations were happening."
A wave of workers at Refinery29, Glossier, Adidas, and Everlane drove much of that conversation last summer. They spoke out about racism and unfair working conditions.
At Refinery29, for example, one employee tweeted that an executive once confused her with a caterer. Another employee tweeted she was paid $15,000 less than her two white coworkers who were doing the same job. The site's top editor and a cofounder resigned soon after.
"Increasingly, employees and consumers are expecting corporations to take a stand on social issues," Robert Kazanjian, a business professor at Emory University, said. "In a sense, employees feel the right to hold their management accountable."
The tech company Basecamp encouraged employees to read books on anti-racism during the protests that followed Floyd's death. But weeks ago, the company banned conversations about "societal and political" topics at work. Over one-third of employees resigned as a result.
In addition, many people expected CEOs to speak out on Georgia's restrictive voting laws passed in April, as evidenced by protests and social-media posts that populated the internet.
"For CEOs, you can't say something about racial equity and everything else and then not say something about voter suppression and inequity happening in Georgia," Ross said. "Because these are the same issues at play."
Despite CEOs speaking out more on social and political issues and investing more in diversity initiatives, some worry business leaders are merely engaging in temporary, performative allyship or speaking out for good optics.
"I fear that many corporations seized the opportunity to engage in Blackwashing: focusing on performative BIPOC inclusion at the expense of substantive change," Jana, who is Black and nonbinary, said.
Over the long term, companies that merely engage in temporary diversity and inclusion work will be called out by consumers, investors, and employees, they added.
Not all consumers and employees are onboard with CEOs becoming social activists. Some Republican leaders and their constituents have called for boycotts against companies like Coca-Cola, Delta, and Microsoft after leaders criticized voting laws or bills in Georgia, Texas, and Florida.
But polling shows that the majority of Americans support most causes CEOs have been speaking out about recently, like voting access, racial equity, and the climate crisis.
Minaya is optimistic about the future.
"The stars have aligned. The right conversations are happening," he said. "If you want to attract the best talent and retain them, if you want to attract clients and customers, you have to do a better job of letting the public know what your values as a firm are. You have to stand by them."
Chauvin was convicted for the murder of Floyd on April 20. George of Just Capital remembers watching the trial, sitting on the couch in his Queens apartment, holding his 7-month-old son.
As the judge read the verdict, George looked down at his son. He thought about his future, feeling thankful but uneasy.
"We found some level of justice that day, justice for the family but not for society," George said. "We have to advocate for what is just."