BET founder Robert Johnson told CNBC on Monday that he believes companies will tackle racial inequalities in their workforce more seriously once a failure to do so impacts the course of their workforce. actions.
“Businesses understand the return on investment of capital. They include return on equity. They include total return to shareholders, ”Johnson said on“ Closing Bell ”. “Tie all of these factors into creating job opportunities at all levels for black Americans, I think then you will see results because that’s what businesses understand. They respond to financial factors and market conditions. ”
Johnson’s comments follow the publication of a new report on the employment of blacks in the US private sector by consulting giant McKinsey & Company. Drawing on data from 24 companies that together have 3.7 million workers, the McKinsey report found notable disparities in the representation of blacks in managerial roles.
Black Americans make up 12% of the overall private sector workforce, but in companies participating in the McKinsey report, they made up only 7% of employees at the executive level. Black representation drops from 4% to 5% at senior management, vice presidents and senior vice presidents levels, according to the report.
“On the current trajectory, it will take approximately 95 years for black employees to achieve talent parity (or 12% representation) at all levels of the private sector,” the report said.
Johnson has said in his opinion that the only way companies will work seriously to fill employment gaps, especially in management positions, is that there is “a responsibility for companies not to engage to put an end “to disparities.
“I think there are ways to do it,” said Johnson, who founded Black Entertainment Television in 1980. A little over two decades later, in 2001, he became America’s first black billionaire. when the holding company of BET was acquired by Viacom. He now seat on the board of Discovery and is founder and president of RLJ Companies.
Johnson said one way to be held accountable for correcting racial disparities in employment is to make it a target in corporate charters.
“Shareholders should hold them accountable for this once it’s in their charter,” Johnson said, adding that proxy advisory firms like Institutional Shareholder Services and Glass Lewis could “consider the whole concept of a vote.” no “against companies that don’t commit to doing that. that kind of racial parity or basically bridging the employment gap.”
Johnson said companies of all sizes should also pledge to abide by the NFL’s Rooney Rule, which the league expanded last year in an effort to improve diversity within its coaching ranks.
The teams must now talk at least two external minority candidates for head coach positions, down from at least one since it was first adopted in 2003. In addition, the rule has been expanded to require teams to interview at least one minority external candidate for open coordinator positions; there had been no diversity mandate covering these roles previously.
NFL franchises could be fined for failing to comply with the Rooney rule, Johnson noted. “I’m not sure we want to fine the companies because they could easily pay the fine,” he warned. “I think there should be some sort of moral equivalent that if you don’t, you get singled out and your stock is flagged as failure, forcing some people who believe in this form of racial equity and racial equality to take their investments elsewhere. ”
Last year, the Nasdaq submitted a proposal to the Securities and Exchange Commission focused on improving diversity among boards of directors. The exchange operator’s proposal would require the majority of companies to have at least two diverse directors: a woman and an LGBTQ person or an under-represented minority.
According to the proposal, companies could ultimately be delisted from the stock exchange if they did not release board data. As of December, when the proposal was made public, more than 75% of the roughly 3,200 companies listed on the Nasdaq did not meet the requirement, according to the New York Times.
Johnson has previously offered suggestions on how to close the racial wealth gap in the United States. In an interview with CNBC earlier this month, Johnson highlighted the need to foster black entrepreneurship in America through capital allocation programs.
“Black businesses tend to hire black people as a whole, so you create more black businesses, the bounce goes to more black jobs,” Johnson said. “More black jobs mean more blacks paying for property, blacks… saving for retirement, blacks investing. Ultimately, we are taking a giant step towards closing the huge gap in wealth.”
A report from Citigroup last year found that racial inequality has cost the U.S. economy $ 16 trillion over the past two decades.
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