Why racism is a business issue

In the summer of 2020 many companies across the UK, Europe and the US entered a period of introspection about the extent and nature of racism within and around their organisation, prompted by the latest phase of the Black Lives Matter (BLM) movement.

What began in May as the shocking story of yet another killing of a black person by police in the US soon became a spontaneous, international protest. Statues of slave traders were torn down; city streets were occupied by marches at the height of the coronavirus pandemic, and many, many more stories than just George Floyd's were aired and re-aired, seen in a new light as we collectively faced up to the scale of racism in western society.

Racism is a social and a political issue but it is a business issue too - a fundamental one, not just something for HR to deal with. Yes, overt racism happens in workplaces and should be tackled, but the problem goes much deeper than that: racism is institutional, which means that companies are discriminating on grounds of race whether they are aware of it or not.

Listen to our Brain Food For General Counsel podcast: Why racism is a business issue  

The legacy of this phase of the BLM movement is that the message that racism is structural and institutional has reached a wider white caucasian audience than ever before.

And this is why businesses need to pay attention – if yours is not actively seeking to find out how your processes, procedures and culture discriminate against black and minority ethnic people, then this is a problem you are not addressing.

What is structural racism?

White caucasian people in western societies enjoy benefits of capital, class and culture not available to people of other ethnicities. This is structural racism: society is geared to their benefit in profound ways that run much deeper than the prejudice of individual people.

This means they have much better life outcomes - they are richer, stay in education longer, live longer and are less likely to enter the criminal justice system. In the UK, for example, black Caribbean people are three times as likely to rent social housing and almost half as likely to own a home than white British people; white people are twice as likely to achieve high A level grades in England than black people, and black people have double the unemployment rate as white people, and those who do have a job are paid less, according to UK government figures.

Inequality on this scale, replicated across western societies, is not an accident or coincidence, it is the result of system-wide discrimination on grounds of ethnicity. This is structural racism.

Why does that matter for business?

Structural racism is an urgent issue for business because companies import society's racism into their own ways of working without knowing it. You can employ not a single overt racist but still have an organisation that is discriminatory.

Organisational psychologist and leadership expert John Amaechi explained how this can happen.

"Most organisations have no idea the number of different ways that individually benign policies, procedures, ways of doing things, norms and values combine to create inequality," he said. "We do cultural audits or organisational diagnostics for a lot of different companies and they find that when you do a rich ethnographic study, one that gives you proper thick data, you suddenly find out that there is inequity and you find out how it is being generated. And while some of it may be because of poorly intentioned individuals, much of it is just because of the way the system is built."

"So, for instance, some people might have proxies for talent Many firms will only choose candidates from one of 16 different universities in the United Kingdom, one of three in mainland China, one of two in France. By doing so, you are creating an environment where only certain types of people will ever join your organisation. Anybody who thinks they can validate the fact that the Russell Group are across the board and distinctively better than the University of Wolverhampton, you are deluded. Bright young people will go to a lot of different universities. It is a proxy, it is a lazy proxy for having actually assessed people individually."

"Simple things like having unstructured interviews for candidates - we know that unstructured interviews lead to more subjective choices. Not training your interviewers and your hiring managers to be objective in their assessments," he said. "There are so many simple ways that we facilitate bias in our workplace. It is not necessarily whilst it may not be evil in intent, it is not accidental. People like people who are like them. Similarity and familiarity are comforting and that is really the rub about diversity and inclusion whether that be about race or anything else, it is individual people in positions of power choosing personal comfort over organisational performance."

None of this is a surprise to Alexandra Aikman, a Pinsent Masons lawyer who experienced barriers that white peers who wanted to be lawyers probably never even knew existed.

"My career adviser told me not to pursue a career in law because, in his words, as an ethnic minority and as a female from a state school and a single parent family I would struggle in such a competitive industry," said Aikman. "When I started my legal career as a trainee in Birmingham, which is the UK's second most multi-cultural city, I was the only person of black heritage in the office at that time until the cleaners walked in. So every lawyer was white but every cleaner was black."

"As I progressed through my legal career I had comments like "you speak well for a black lawyer" or "I have never worked with a black lawyer before but you're actually really confident and you're quite articulate", as if that fact was surprising to those people," said Aikman. "So when we talk about racism we are not necessarily always talking about overt racism but institutional, structural and systemic racism. What systemic racism means is that even if where no racist people in the system, the system itself will still discriminate or make it more difficult for a certain group of people to work."

John Amaechi said that organisations are surprised by the experience of Alexandra and countless others, and that this is because of the lack of ethnic diversity at the top of most companies. "Not having the knowledge of black people is simply a question of never having created even one relationship that is authentic enough to be granted insights," he said. "Right now we have got companies that are trying to solve problems with systemic racism in their organisation who are, for the first time in 18 years in the case of one individual I talked to, speaking to their black employees."

Taking action

So how can organisations go about tackling this problem? The first step is to recognise that it exists and find out how it is expressed within your organisation. That is the kind of help companies are now asking for, said Stuart Affleck of Pinsent Masons' diversity and inclusion consultancy Brook Graham.

"They are coming to us to equip them on how to have a conversation, giving them confidence and support and education around how to discuss race and ethnicity within the organisation but also looking at this as a longer term plan that is going to identify where bias may be prevalent in the employee lifecycle, in policies and in practices, so you can unpick that hardwiring that might be built in unconsciously into organisations which is creating that inequality," he said.

John Amaechi says that self-examination has to be forensic and specific.

"Do a cultural audit. Understand what parts of your organisation are causing the damage. There will be often benign and seemingly unrelated to race or gender," he said. "Set a standard, declare that your organisation will be anti-racist and not just not racist and help people understand what that means in action and in context. So not just broadly in the wide world, but 'in our firm being anti-racist means these types of things'. Show people the opportunity points where either mistakes are made, as in bias enters the equation, and also the opportunity points for shifting that. It is very boring the work that has to be done, nobody is going to pat you on the back but the reward will be intrinsic. You are going to have the best brains in place."

Alexandra Aikman said that one of the most important things an organisation can do is to encourage explicit conversations about race. When we stop pretending that bias does not exists then we move closer to minimising its effect, she said.

"The best way to challenge unconscious biases is to make them conscious, and the way that we do that is by having conversations openly and allowing ourselves to be politely curious," she said. "Challenge unconscious biases by talking about them, by being politely curious but by also educating yourself about where those unconscious biases came from and where they came from, and they really come from the legacy of slavery."

Self-education

This phase of the BLM movement has drawn attention to white caucasian people's responsibility to inform themselves. Too often black and minority ethnic people are expected to explain the nature of racism, give a potted history and illustrative examples and prove to a white audience that racism is structural, systemic and culture-wide, rather than just a question of individual prejudice.

This is changing, and white people are now expected to know about the problem before entering a discussion about it. The frustration felt by people who are the victims of racism being left to explain it is neatly summed up in the title of Reni Eddo-Lodge's 2017 book Why I'm No Longer Talking to White People About Race.

To help with that process the contributors to this essay and the linked podcast have suggested some places to start.

Black And British by David Olusoga

Brit-ish by Afua Hirsch

Natives by Akala

Bordering Britain: Law, Race and Empire by Nadine El-Enany

Why I'm No Longer Talking To White People About Race by Reni Edo-Lodge

Whistling Vivaldi: How Stereotypes Affect Us and What We Can Do by Claude Steele

Performance

Companies are increasingly acting on race because it is the right thing to do, but there is a business imperative here too: if you exclude people from a black and minority ethnic background from leadership positions you are weakening the quality of your leadership. 
"The goal is not to have all boards be black or any specific number, it's to have the very best brains in the very best spots," said John Amaechi. "That is unlikely to be the case if you have got 10% of black employees in your early years or associate positions and then by the time they get up to the top you have got nobody."
"Well-led diverse teams outperform homogenous teams, but they also provide a kind of prescience for the future because the more perspectives you have, the more diverse your thinking and experience base, the less likely you are to be kiboshed by a new piece of information, the more likely you are to have somebody who has seen something like this before or has an experience or a background that enables them to pull that together in a way that someone without that experience may not be able to," he said.
So racism is a business issue not just because it is experienced within organisations, but because it affects the performance of those organisations. The BLM movement has ensured that nobody could escape the importance of this issue in the summer of 2020; businesses should now be taking action.