In recent years, large American companies and their brands in particular have increasingly emerged as social advocates for more diversity and inclusion. And that both within their own company walls, as well as in the relationship with their customers, and even in the wider society. A number of CEOs even turned out to be real activists who stood on the barricades for equal opportunities for minorities. Because what is good for society would also be good for their business, and vice versa. The company's stakeholders were given priority over the shareholders. It radically broke with the mantra of the economist Milton Friedman who had posited half a century ago that the most important social contribution of a company was to make a profit for its shareholders. Social movements such as #metoo or Black Lives Matter enjoyed widespread support in circles of enlightened entrepreneurs. The favourable economic climate five years ago gave them prosperity.
Some 271 U.S. companies are said to have invested a whopping $67 billion in the fight against racism in the wake of the murder of George Floyd. Employees were given paid leave for "Juneteenth," the anniversary of the end of slavery in the U.S. Companies hired Chief Diversity and inclusion officers, becoming one of the most important positions in companies. And in the boardrooms of these enterprises, the number of people of color rose from 32 percent in 2020 to 35 percent in 2022, according to a Harvard Law School study.
But perhaps the proverbial pendulum is now swinging back in the other direction. In particular, the economic crisis obliges large American companies to look again at the 'bottom line'. Since last year, more and more questions have been asked about the impact of so many diversity programs and their costs. In the meantime, these internal programmes are being significantly cut. And that especially in the technology sector where companies such as Twitter and Meta have allowed many members of the inclusion team to leave.
What's even more troubling: female and Latino employees have been hit hardest in recent months in rounds of layoffs at major tech companies. Women represent 39 percent of employees in the sector, but 46 percent of the layoffs were of the female sex. Two former Twitter employees went to court in December last year to denounce this unequal treatment.
Many companies and organisations, including ours, will have to express their opinions in the coming months and years when it comes to diversity and inclusion under pressure from economic and social headwinds. Then it will become clear whether diversity and inclusion were 'nice to have' in better times, or whether they are principled values, translated into daily practice and manners, which cannot be questioned even when it storms outside.