Hi, everyone. Thank you so much for joining us this evening and welcome to tonight's event. Innovating for Social Equity: The Responsibility of the Business Community, hosted by the Rustandy Center for Social Sector Innovationand George J. Stigler Center for the Study of the Economy and the State. I'm Caroline Grossman, Executive Director of the Rustandy Center and an Adjunct Assistant Professor of Strategy here at Chicago Booth.
For those of you who are interacting with the Rustandy Center for the first time tonight, we are the social impact hub at the University of Chicago Booth School of Business. And we're here for people committed to tackling complex social and environmental problems. We're an important part of the university's social impact ecosystem and we promote innovation, advanced research and develop the people and practices that can accelerate social change.
For those of you who aren't familiar with the Stigler Center, the center is dedicated to understanding the issues at the intersection of politics and the economy, and through research support, analysis of data and economic trends, courses, events, initiatives and multiple resources. The Stigler Center is a destination for research on regulatory capture, crony capitalism and various forms of subversion of competition by special interest groups. We're so thankful to the Stigler Center for being such a strong partner and for helping bring tonight's event to life.
If you've joined us for our previous innovating for social equity sessions, you'll probably remember that we launched this series to examine a central question: with billions spent by the public private and philanthropic sectors, why do profound disparities persist? Our first two sessions looked at the role of philanthropy, private market investors and entrepreneurs in addressing social inequity. Tonight's conversation will focus on the role of the business community and driving forward change.
I also want to acknowledge that this conversation is taking place during the month of February. Black History Month is a time to celebrate and remember the many contributions of the African-American community. It's also a reminder that we have a lot of work left to do, to combat racial inequity.
Tonight, we'll consider the role global business leaders can play in building equity. For many years, corporations have relied on corporate social responsibility programs,
which includes social issue in marketing, philanthropic efforts, sustainability initiatives, employee volunteer initiatives, and diversity and inclusion work to build their brands and satisfy customers. But today many are asking if the business community has a responsibility to do more, to address in a systemic way, the deep racial and social inequities embedded on our society. And after countless corporations and businesses have come out with statements and initiatives that promise change, what efforts are most promising to change the current trajectory of inequality and structural systemic racism.
We've convened a terrific panel to address this topic. Our moderator is Brian Fabes, Managing Director of the Corporate Coalition and Civic Impact Executive in Residence at the Rustandy Center and at the Harris School for Public Policy. Brian will facilitate our conversation with Mark Hoplamazian, President and CEO of the Hyatt Hotels Corporation. Paula Price, Public and Private Company Independent Board Director and Strategic Advisor and Professor Luigi Zingales, the Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance and Faculty Director of the Stigler Center. We're also excited to hear from all of you about questions you may have. So after our panelists discussed a series of questions, we'll leave some time to take questions from all of you. If you have a question, please submit it during the webinar via the Q&A chat function within Zoom, and we will try to get to as many questions as time allows. With that, let's dive in and I'll turn it over to Brian and the panelists.
Thanks, Caroline, and thanks, everyone, for joining us. I could not be more thrilled to be part of this conversation, such an important topic and such an incredible set of people to talk with about it. And so I just, I just wanna dive in and maybe just start with Paula, with you, and Mark, as business leaders, just ask you, what is it that the firms that you are associated with and leading today, what are they doing to increase social equity? Why are they doing it? And importantly, how might this differ from ESG and CSR efforts that you may have seen one, two, three years ago? Paula, do you wanna jump in and-
Sure. Thank you, Brian, and it's so good to be here, virtually, with everyone and very much looking forward to the discussion today.
I serve on the boards of a few companies both publicly traded and private. And so I will be sharing my experience about these companies sort of collectively. I'm not speaking on behalf of any particular company, but I have to say that I have been very pleased with the stances and more importantly, the actions that these companies are taking. I look at them from the perspective of, you know, that each company is at a different point on this social equity journey. And so what is important is that the steps that they now take move them significantly forward from where they started.
So for example, all of them have been publicly open in terms of standing against racism, which is an important start because it allows them not only to let their own employees know where they stand as a company, but also to influence the culture of the business world as a whole. So each CEO, in their own authentic voice has expressed their views. And I would say that this is certainly from my perspective, a very welcome change in so far as CEOs who are clearly some of the most influential among us are being more vocal in spaces that they might not have been in the past. They're using their voices and their platforms to promote social change, while at the same time doing all the things that are necessary to deliver shareholder return.
So in addition to that, each company has pulled together goals around representation, for example, and they have been very, very thoughtful in these efforts. It used to be the case that companies would say, oh, you know, it's so hard to find this kind of person, a woman, a black person, or anyone from an underrepresented group, for this particular position or this particular industry. And now what I'm seeing are analyses around how many black people, for example, are in this particular geography with these academic degrees. So really understanding better what the pool is by the data so that they can improve. And some are increasing their remote hiring in the geographies where diversity is extremely limited within a particular population.
So companies are, they're being more creative, they're developing different programs, participating in existing ones that create runway for underrepresented people. And they're making these goals public. Some will say we're doubling or tripling the representation that we have today in three or five years. So of course they have to measure and deliver these results, the same as they would for any other business goals. So what I am seeing is more action to support the words and this is new and this is good and it's very encouraging.
That's wonderful. Mark, do you wanna talk a little bit about what Hyatt is doing?
Sure, thank you very much, and thanks for having me be a part of this important panel. For us, I guess, just as a quick reminder, for those who don't know, we are a global hospitality company operating about a thousand properties in more than 65 countries around the world. So the diversity of our marketplaces and the employee base that we have, and not to mention the guest base that we have it's extraordinary. And so I think that's the context in which I'll be making some comments.
First and foremost, I think, for us, it's about purpose as a company. Purpose has become a buzzword in recent past but our journey really started many years ago. And it does answer the central question as to why you exist as an enterprise. And for us, we define our purpose around caring for people so they can be their best. And extending care to someone is very different than just serving them. And in order to be able to care for someone you have to practice empathy and understand where they're coming from and what their needs are, and then take action against that. And our job really is to help people be their best, no matter what that might look like. In some cases, people are staying with us because they're there for celebration. And in other cases, it's there for a funeral, in other cases it's there for a medical treatment for a family member. There are many different purposes of stay and many different types of support that people need while they're with us. And so helping people to be their best is really the best way that we can extend ourselves and help to keep them effective in what they need to do.
As we reflected on how we can keep our colleagues at their best and how we can care for them, we quickly turned to the idea that the communities in which we operate are the communities in which our colleagues live. And so we need to pay attention to things like the environment. We need to pay attention to things like the education system and what we really ended up focusing on most of all was every community around the world in which we operate, including in some acute examples in the United States, the opportunity gaps that exist, the income gaps that exist and the wealth gaps that exist across those communities are extraordinarily wide, and have consistently widened over the last five to 10 years. And we thought it was an extraordinary opportunity for us because in the hospitality business, you can bring a lot of people who don't have deep skills into your workforce because we have many relatively low skill entry-level jobs. And then help develop them, help build skills, create job pathways and even careers. So we really focused on that.
We created a program called Rise High, which was committed to hiring 10,000 so-called opportunity youth. These are young people say between the ages of 16 and 24 who are out of school and out of work, and really not a part of the commercial community in their local cities and towns. And we thought if we could actually achieve that, it would represent a pretty significant proportion of the new employees that we expect to hire over that period of time and could make a really significant difference in the communities in which we operate.
I would say in the more recent times, that's translated into a sharper set of diversity equity and inclusion goals that were occasioned by the aftermath of George Floyd's murder and the elevated awareness and transparency that I think a lot of people called for an appropriately, a demand of companies. And as Paula was describing earlier, we are also committing ourselves to representation goals. That is who we employ, who we develop and who we advance. We're also including who we support, that is philanthropic efforts in our communities especially those community-based organizations that are supporting some of the hardest hit communities. And the third dimension of it is to pay attention to who we're buying from and who we're doing business with, so that we can elevate minority content in all of our purchasing and procurement activities around the world. So that's really the framing of how we've organized ourselves to move forward.
And you also asked why we're doing it. I think there's a really clear and crisp answer to that. First, it does help to fulfill our purpose as a company because caring for our own colleagues and for our guests means having a vibrant economy and a vibrant local community in which they can visit and enjoy different experiences. But secondly, any economy that is strained by wide variances and wide gaps, is not stable over the long term. And so the idea that we can stand by and continue to witness a widening of the opportunity gap in particular in our economy, is extraordinarily short-sighted. And we do so only at our own peril. So there's a very practical business imperative to help be a part of something that will close that gap not just in the U.S. but in many markets around the world.
Thank you, Mark. Luigi, Mark just said that his business imperative is because of an economic phenomenon or principle that he needs more flourishing communities. How does an economist look at what Paula said and what Mark said and what companies are doing? Does it makes sense from an economic standpoint?
Absolutely. I think that, first of all it's important to remember that religious tolerance in Europe started in the Netherlands in order to attract the most advanced and sophisticated artists and from all over the world. So Spinoza was not only a philosopher but also a very good producer of glasses and lenses, was attractive from the Portugal because in the Netherlands he could be freely a Jewish person and in Portugal could not. And the Northern part of Europe thrive with all the most advanced and innovating craftsmen because they were more tolerant versus the Southern Europe with an inquisition and so on and so forth.
And from an economic point of view, every form of discrimination is a huge economic loss. And there are plenty of papers showing how much we lose in term of talents, in term of productivity. And this is besides the human element, which is important. And I don't wanna underestimate and underappreciate that, but even if we are purely and only interest in the bottom line, there are plenty of reasons why we wanna fight discrimination. We wanna fight racism. We wanna fight a widening gap especially in opportunities, because those are people who cannot fully develop their talent and this is talent loss. So I think there is definitely an economic argument that reaches the bottom line, and Mark is right on that.
Second, I see, and Mark is also right in that, that firms or also organizations that bring together people and people are driven by things other than money. So all too often, we economists end up falling into the stereotypes that men are only driven, or human beings, I should say, are only driven by the maximization of their income. And the irony is that we are the ultimate proof that this is not the case. I could make more money by not being a professor and doing something else. And the reason why I am a professor is because I care for other things other than money. And so a lot of the people who joined the organization that Mark work for, that Paula work for, they joined also because they want to fulfill something else other than profit maximization. And so, and if these people care deeply about certain values as they do, they want those values respected and represented in the firms they operate. And I think that that's something that firms are increasingly paying attention to, because especially in the younger generations this is becoming a very, very important issue.
Let me ask everyone, picking up on that. Is this a phenomenon of companies realizing the things Luigi is talking about, that's building over years. I mean, if it's about generational change then that's presumably building. Or is this something that really had a step change in 2020, between COVID and George Floyd's murder and all of the other things? Is this the step change or has it been going on for awhile? Paula, what do you think?
Yeah, I would say that it is a step change. There has been activity over years. I mean, those of us who have been working for decades and have been involved in this journey for social social justice, know that we have been laboring around these issues for a very long time. But what the events of 2020, the murder of George Floyd combined with the pandemic have allowed us to do is to see, with our own eyes, the inequities. I mean, the pandemic itself had a lot of disparities in terms of the effects on blacks and other groups. So we saw it that way, but we also saw it from the uprisings, all of the uprisings of around systemic racism and all of those things kind of came to bear where we all saw it over and over in a loop on television with our own eyes. And, if we can witness that and not respond to it then shame on us. But fortunately we have been, we have seen a lot of, as I mentioned before, and as Mark also pointed out, we have seen people responding to this in a way that I think is unprecedented. So I would say this is definitely a step change above and beyond that activity, which has always kind of been there, in some cases under the radar.
Also one of the step changes that I think is clear and you mentioned this, Paula, are CEOs and business leaders speaking out, and not just in emails but in changing where they give political contributions and even changing policies. And that's certainly been a step change. But I wonder, I wonder to any of you, is that putting too much responsibility, frankly, on the business community. Are they stepping into places where they shouldn't be stepping into and other people have responsibility for that? What do you guys think about that?
Well, maybe I'll just quickly comment, first, on your prior question. I don't really think of it as either a continued evolution or a step change, I think of it as a point, an inflection point in pace of change, where it was an accelerant. The two dimensions of the accelerant were the tremendous raw emotion that people were feeling in coping with COVID and in our case, the hospitality industry was hit very hard. And so we were at a particularly exposed from an emotional perspective point in time when George Floyd got murdered, because we had just effectuated a very large reduction in force.
And I think that it, therefore the aftermath of George Floyd's murder really left a much more deeply felt emotional response. So we've many companies. We have DEI initiatives that date back many years but the resolve and the focus on the necessity of really moving the needle elevated a lot, and part of that was because how it felt. It wasn't a left brain activation, it was more of a right brain and an emotional activation. And I think that's actually really critical because we all know when you feel something you end up acting on it with more results. There's just more, there's more there there.
With respect to your second question, which is are CEOs verging into areas where they shouldn't go? I personally don't believe that our role as a company or as a leader of a company is to become political. I don't believe that weighing in on politics per se is actually a role that I see as appropriate. I tend to focus on the things that are going to impact my colleagues, our business, which are also impacting our guests and their safety and security, and also their quiet enjoyment of their time with us. And so those topics really, really matter to me and I will weigh in.
And I have taken positions, very public ones, and I'll just give you one example, which is I signed a letter to our former governor in Illinois supporting gay marriage. And the reason I did it is because we have a large community of LGBTQ+ individuals. And I thought that it was absolutely critical to be able to help care for them so they can be their best. And by the way, continue to be able to attract some phenomenal talent who might be LGBTQ+. And so I thought of it as very, very clearly linked to our business and something that I believed was really important for the business community at large. And we've not weighed in to who we give money to because we don't make political donations to begin with. So I personally think that there is a line to be drawn and I think weighing in in topics that are relevant to your business, and to your workforce, and to your customer base, is appropriate. Just being political, not appropriate, in my opinion.
I would just add to that that businesses operate within context, not within a vacuum. And certainly this past year, the context has been about the pandemic. It has been about systemic racism. And so you have to operate within that context. And in my view, you, as a business, CEOs, and businesses, have a responsibility to be good citizens in the context within which they operate. And if we ever hope to get to equality, human equality, we need leaders of all sorts,
including and perhaps, especially CEOs, to use their voices and their platforms for the greater good. It's not to say that they stopped focusing on shareholder returns. These things are not necessarily in conflict with each other.
I agree with Mark that I think was more the murder of Floyd, and COVID in general, was a catalyst of some or accelerator of a change that was slowly taking place but really accelerated you in this period. And I think that part of it is also the education. I live through the education of my children and stepchildren here in the United States, the level of education that we see makes the new generation much more aware of this issues. And so as they come into age, as they become important, they of course, have a huge influence on that.
And also, I wanna say there is no doubt that the disproportionate cost of the police brutality falls on minorities, but this is an issue for all of us. And it says, if the police doesn't work, it's not a problem only for black people, is a problem for every American citizen, and every person living in the United States. And so when the police is abusive is really the abusive to all of us, and business is the first to be concerned about this. When we say, at least in the old days, the conservatives were about law and order and this is not about law, and this is not about order because there is nothing in the law and nothing in the order that says you should behave like this. In fact, quite the opposite. So I think that this is a fairly uncontroversial issue as Mark said, is really not political. I think the disappointing fact is that this is a, in the United States, sometimes, it's still a political issue. But this is I think, pre-political, is not a republican or a democratic issue, at least it should not be.
I am a little bit more concerned about the point that Mark is making about customers because it could go either way. Now, you're saying, oh, a lot of our customers are in the LGBTQ+ community and so we support that. But if the majority of your customers was Catholics, would you be against? That's a bit where is dangerous, that depending on who your customers are, you might go one way or the other on certain issues. So I think that that some issues, and I think that one on police brutality is one, I think is in my view, regardless of who your customers are is a principle that should apply to everybody. And we should defend as citizen, as corporation, as organization, as anything.
I agree with that, Luigi, and what I would just add, we actually had to confront this issue several years ago. I think it was 2017 or 2018 where we decided to draw our line. And the line that we drew was that we are hosts to groups that have different points of view. And we've got Muslim groups, we have Catholic groups, we have every dimension of religion and societal groups coming through our hotels, and we are not gonna stand in judgment or apply some other judgment that overlays that. So I completely agree with you.
The place where we drew the line was hate groups. The groups who were the primary role of the organization was to demean, diminish and otherwise attack another group of people for their beliefs or for their religious followings or otherwise. And it proved to be a challenging thing to gauge because we can make reference to the FBI list. We can make reference to the ACLU list or other lists that are out there, but ultimately, you do have to apply judgment and understand it.
But our motivation in that was, first, we have a lot of colleagues who might have been in the targeted group that was being targeted by some of these hate groups who were extremely uncomfortable being in the same space as people who were expressing a desire to do harm to them. And that could not, we could not allow that to happen because they are our colleagues, and again, based on a sense of care. And the second thing that's true is that the same is true for other guests in the hotel at the same time.
So we did draw that line. It has had effect on a few different pieces of business, not a huge amount, but some. That had more to do with a lens of safety and security that was not just physical safety but also emotional and psychological safety. So I strongly agree with what you said Luigi and the way you said it. I agree that we should not be in a position where we're trying to make a gauge about that. But we do draw a line where the principle purpose of an organization is to demean and otherwise attack another group.
Paula, have you, you're involved in many companies, so I know you're not speaking for any particular company, but have you had to grapple with this, what's appropriate, and what isn't for us to speak out on?
Yeah, well, each of the companies, I believe, have to grapple with that and to decide where they will stand on these particular issues. I said earlier that company start on this journey, the social equity journey from different points. And so what I have seen is some companies have really just gone all out and they've just declared they're in this, they're in it. They're taking a stand, they're standing up. I wouldn't say they're taking political stance, but they really are being quite vocal on different platforms about, you know, their disdain or some of the things that they're seeing in this world. And in particular, following the George Floyd murder. So some companies have really just gone out there.
And then others, haven't been as vocal about these sort of things in the past, and yet they are equally appalled. And so they've gone out and they've taken less of an aggressive stance, in terms of the words that they've used. There are people who have grappled with this whole issue of customers, you know, how vocal should we be about these issues from a from a political perspective when they're downright horrible, no matter who and what your political view's? Well, I wouldn't say that, but they're downright horrible, how vocal should we be on these issues, when we know what's in our hearts? These are difficult issues, especially when you have customers who will vote with their feet. So it is an issue that all companies grapple with both on my boards and my previous employers. It's a really difficult issue.
But each of the CEOs, each of them, to a person, had gone out and they've made statements that reflect their authentic selves and how comfortable they are with these issues. Hard to say, if there's a right or wrong. Certainly if something is just evil, then there is no right or wrong. I mean, it's wrong, right? But there are other times when you really have to feel for the position that we're placing CEOs in. So yes, I think that a lot of companies are grappling with it this and made more difficult when you're in the CPG space or the retail space, et cetera.
Brian, if I could just make one quick comment, you were asking about whether companies or CEOs are verging into areas that they shouldn't. I think you have to reflect on some context here. It's very interesting to see the most recent Edelman Trust Barometer results. Employees consider their employers more trusted. They have more trust in their employers than they do in the government. And I think the government has done a lot to earn that distrust or maybe just lack of trust because of some extremely volatile behavior and policies that have been implemented over the last several years. And so I think there's a dynamic here where there's a sense of security that people need to feel and they're finding it in their employer.
And so I think in many ways, companies need to step forward in the face of government institutions and instrumentalities that have failed to actually fill in some important gaps in society. I think the lack of coordination on some really important topics over the last several years has also caused a gap, and companies are sitting by saying, hey, well, that's a problem, we can't move the needle in Washington DC. So time to roll up our sleeves and take action against these things. And by the way, that in part is why the Edelman Trust Barometer yields what it does. So I think there's a context here that you need to also take into account as to-
I think it's really important in context. I don't think anybody wants to argue against companies doing the right thing, but Luigi, I worry in this, that if companies are trying to fill all the roles, if government isn't trusted, how are we building the trust of government? Is there a risk if we say companies are taking on the role because they're more trusting now than government, does that create some risks in there?
I think there are two aspects of that. Number one, is companies have the right to take whatever position they want as long as there is competition in the marketplace because people have alternatives. I think if I am a baker and I don't wanna sell, let's say that I am a Jewish baker and I don't wanna sell my bread to the people who I consider anti-Semite. I think that is completely my power to decide not to do that. Whether a corporation or I'm a single simple baker at the corner, I think that I have the right to do that. Now, if I am the only provided of food in town, probably, is not a good idea that I have this power because the guy can die. And while sort of, we don't want people to be racist, I think that I don't think the punishment should be starvation decided by the private business. Now, of course it's an exaggeration, but I think that this problem is becoming increasingly important especially when it comes to news and communication where the power is extremely concentrated. And if you people can decide the faith of a billion of human beings. And I think that that is where I am concerned.
The second thing I'm concerned is that certain things are done better by the government. Let's think about COVID. I think a response to COVID is better organized by the government than delegated to the private sector. And I think it's lovely that the private sector decides to ask for mask when kind of into the store and that clearly would use as the spread of the disease. But I don't think it's a substitute for a government providing a good response.
So I think there's a risk that as the people trust the government more and more, sorry, trust the business more and more, the government becomes more and more marginalized. And while I don't want the government to have too big a role in society, I don't want it to have too small a role either. And I think one of the lessons that hopefully everybody has learned on the COVID is that you do need a government to coordinate a joint response in COVID. Because as a friend said, is that it's like in a swimming pool, you can't decide that you say oh, you cannot pee in half of the swimming pool, if the other half there's no rules, right? There is literally a spill over. And I think that COVID is the same thing. And so I don't think that we want only business to make this decision when these are important decisions.
Well, I'm told that now that we have an economic analogy of what's going on in our economy. I should switch to the audience Q&A, thanks Luigi. So I'm gonna start with actually the first one that came through, which hearkens back to one of the questions I asked at the beginning, it says, what is different now with diversity compared to affirmative action minority set asides
of the '80s and '90s? Anyone, the thoughts on what the conversation, what people are doing today differs on what was happening 20, 30 years ago?
I'll start. I think what is different is really a lot of things have happened in the past 20 to 30 years. So it's been a lot of work and research that shows that diversity is actually good for business. There's been research that links diversity to innovation, there's research that links diversity to product profitability. There's all of these different programs that sort of, if you implement these programs for one group, you learn that this is actually good for everyone. So there's sort of that, there's the acknowledgement that diversity is actually good for business.
There is now a renewed acceleration, call it whatever you will, passion, around sort of removing systemic racism, and diversity is a part of that, improving representation is a part of that. The difference is also in terms of how we go about doing it. So many businesses have recognized that we can improve representation, but, you know, you hire underrepresented groups and you don't have any other programs in place, you can't retain them. So there's been an increase
focused on inclusivity. There's been increased focus on equity. So it's evolved from these other sort of, kind of narrow ways to look at sort of diversity. I forget the terms that you were using, (mumbles) whatever the terms were, to broadening them. There's diversity, equity, and inclusion, how do you improve diversity? How do you keep it, how do you retain it? And how do you make the culture such that it's not just for the underrepresented population. It's not just improved for them, but for everyone. So there's just a lot more experience, a lot more thought that goes into, you know, how do you think differently about diversity.
If I may add not for business, but for universities, after all, we are kind of a business too. And I can tell you in the last 30 years, I'm sorry to report that I've been in the business almost as long. There's been a dramatic change in the internalization of certain norms in a sense quarter did exist in the past, but it was seen as a burden imposed from the outside rather than something that everybody thought was the right thing. They matched like in the palace period. And I think that now is not universal, but I will say there is a majority of people in leadership position who buy into this, not just for a formal thing, but for a substantive thing and that what makes the difference.
Well said, I fully agree with both Paula and Luigi on this
There's a question here that is, I think, specific to, I happen to know a little bit about the firms Paula, you and Mark are involved in and this is something I know you're working with. This is what challenges have the panelists faced in creating inclusive jobs and pathways for low income communities? And how do you measure the success of initiatives in narrowing the opportunity gap? Do either you wanna take a crack at that?
Paula, if you-
Sure, sure, I'll start, I'll kick us off. So, there's been, just even recently, just the number of programs that have been developed but also companies are, they become more involved with existing programs. So non-profit organizations who have been working in this space for forever. This is what they do day in and day out. They have a certain expertise. I see companies reaching out to different organizations who have internships or pipeline programs for underrepresented groups that bring them in and then support them with programming. So that's one way that people are addressing this challenge of, you know, this, how do you improve representation and how do you keep these underrepresented population in your group? So that's a challenge and that's one of the solutions that I see.
Yeah, so I'll add to that and give you a couple of very specific examples. Here in Chicago, I chair a board of Skills for Chicagoland's Future, which is dedicated to actually placing people into jobs, and the vast majority of the people they place are from underprivileged areas, South and West Side of Chicago in particular. And a lot of the challenges that are faced there have to do with recognizing and understanding through the practice of empathy and experience, what's needed to support people to have a job and to be able to keep a job. A lot of it's transportation, some of it's family circumstantial, and you have to surround people who are coming into the workforce especially if they're traveling downtown into the loop area to show up at a job, you have to really understand what's required to actually put them in a position where they can be successful.
The second thing I would say is don't stop practicing the empathy that you started with because understanding what their challenges are and then designing around that 'cause that's the user base that you're really trying to design for, and then surrounding them with effort to inform managers and leaders who are leading the groups that they're a part of, or that are intersecting with them, is really essential.
So I think a lot of this is not a plug and play solution. This is, in many cases, a very highly customized and purpose suited way of bringing people into the workforce and having them be successful. So does it take extra effort? Absolutely. Is there more of an impact over time? Absolutely. So you get out of it what you put into it but a lot of it has to do with paying attention and listening very intently.
I'm gonna go to a question that, I think, picks up where we were at the end of our discussion. While companies may seek to be apolitical, many everyday Americans feel politically disenfranchised and feel that corporations do in fact hold tremendous political power. How do you seek to show up as apolitical and yet responsibly wheel the tremendous political power you do hold? And, Luigi, maybe you can also just talk about your observations of the companies who do that well, and don't do that well.
I will distinguish between the regulatory business from the business at large, because in the past, for example, Walt Disney was saying well, Mickey Mouse is not republican or democrat, because of course they wanna appeal to both sides of the aisle, both as a consumers, but also when it comes to renew the copyright of Mickey Mouse, which is at the end the a monopoly that extracts a lot of a rates out of mostly poor people in a way that is extremely, I think, negative for society. So their not being political, or not being partisan, is actually negative, because what they want to do is push their own interests over the interests of society at large. And I think that's bad. And then most people don't realize that the copyright for Mickey Mouse is extended every time it's about to expire. This is the copyright law, not only in the United States but in the world, is driven by Walt Disney. And they succeeded and expanded copyright to 75 years even for production that was done by people who were dead. And so there is no incentive reason, we can discuss, reasonable economists disagree, what is the right length of a monopoly you have to create in order to induce the production of good stuff like Mickey Mouse.
But I think that every economist and every, actually, human being, will understand that you cannot increase production out of dead people. Incentives don't work with dead people, unfortunately, because we cannot resurrect them. So extending a copyright of stock produced by Walt Disney that is dead, is not gonna increase the creativity of Walt Disney. In spite of that, Walt Disney succeeded not only in passing these in the United States, but in the world at large. And the only function of that is we distributed brands from consumers to producers. I think that that is the bad part of business we don't want to see.
The good part is when they are engage in promoting the growth of people that otherwise don't have opportunities. The fact that they fight against races, all the other stuff. So we need to be very careful in realizing that they often, business when it does that, does it because it's in its interest and there is nothing bad with it. That is capitalist, but we cannot rely too much because certain decision must be done in the political sphere where the private interest of some individuals don't weigh excessively large.
I'll just weigh in on a different dimension of that and say that the way I see it is that the polarization, especially in the United States, although it's happened in many other countries too,
has grown significantly, and is today at an extremely high level. And often, what we see is the reduction of a complex issue to name calling and identification and cubby holing of people,
which really is extraordinarily, it's a big detractor of advancing understanding. There's not much understanding going on what there is sort of an echo chamber reinforcement of a very narrow set of messages that, by the way, the press is very happy to continue to promote because they're serving their own interests, right? We should also mention here that it is facilitated by and contorted by a press, whose only interest is their bottom line. That is what they are serving.
And so in a world like that, you have to step back and recognize that, you know, when you start talking about lower income people being disenfranchised, that's not just a racial issue. There are plenty of lower income white people who feel disenfranchised and think that globalization was their enemy and that Donald Trump was their savior. And because, he took a very anti-globalization perspective than America first perspective. And part of that appeal was, hey, all this globalization stuff is for the elites, but that doesn't help me.
And then you could look at the Black Lives Matter movement and say, not the organization necessarily, that's different conversation, but the movement, and mistakenly look at that as purely an economic issue or a purely a racial issue. And the fact is that there's a combination of those things, but there are also some very basic human justice issues. And so what I would revert to and what I choose to revert to is in the context of saying, I don't think it's appropriate for companies to be political, what I mean by that is to use the framing of politics which is very polarized and very strained, as a means of trying to engage on topics that are important.
So where do you look to? I think you look to human values. You look to the things that are gonna promote a healthier community, a healthier society, a more equitable society. And if you stay at that human level, what's good for the human race, what's good for human beings, and you serve those purposes, and ignore whether it's a democrat or a republican idea, or it's a Fox News, or OANN, or CNBC, or MSNBC, all of that's irrelevant. And if you come back to the one true north, which is, we've got to serve humans and elevate equity over time, in order for us to have a healthy society and a healthy commercial base. That's the way I think about it, and I think that's the way we can constructively think about it as companies.
Yes, I agree with that. I think a lot of the issues that we've been talking about as a construct can be put under the big umbrella of human equality, a lot of these issues. And you don't have to politicize them, and nor should they be. Yeah.
We're gonna have to wrap up. I think we've defined that there's about 20 different conversations that we can have many long meals over, but I wanna wrap up on a positive note, because we've also talked about a lot of challenges, could you each give me one thing that you think makes you most hopeful about the prospects for the business community in increasing social equity in our country? I'll go reverse order from where we just ended. So I'll go, Paula, Mark, Luigi.
Sure. What gives me hope are the actions and the passion that I see today, over and over again. Not just from those of us, as I mentioned, who've been laboring in this field for decades, in the hope that we might make the world better for the next generation, but the passion is now coming from allies. And we've always had allies but now we have new allies. We have new allies who are in positions of power and authority, and who in combination with all of us who care about social equity can really make a world of difference.
Thank you, that's awesome. Mark.
To me, I'm excited about moving past labels that have been attributed in different veins
to what this idea of businesses getting much more engaged in social issues is. So it was the face-off between Milton Friedman and his beliefs, and what the Business Roundtable espoused a year ago, or two years ago. It is now being derisively referred to in some conservative press, as a false sense of wokeness, that is really there for performative reasons and not for substantive reasons. All of that is actually getting overwhelmed with the sense of commitment that people are sincerely bringing in themselves to making a difference. And I think that is
the groundswell of that and the numbers of people who are coming at it in a sincere and authentic way, is clearly going to, if it hasn't already overwhelmed all this labeling that people have reverted to. And I think that's great, because once we get over that then we can stop fighting about what to call it, or how to kind of refer to it, and actually get to work on what's needed going forward.
That's wonderful, thank you, Mark. Luigi.
I think the students, both the undergrads and the MBA students that I teach every year, they are getting much more aware, much more involved, much more passionate about this topics. They are the leader of the future, is not just a way of saying, I think that's the reality. And if they remain committed to these values, we're gonna have a better world.
Thank you. I'm now inspired, I would like to go on, but I'm getting the virtual hook, and told I need to provide some wrap-up comments. So a virtual thank you, and huge applause to all three of you. It's just a wonderful, meaningful discussion.
So before leaving today, we wanted to share some information on upcoming ways to get involved with social impact at Booth. Each of these opportunities is on the events page of the Rustandy Center website. Lastly, we'd love to get your feedback on today's event, and please, please fill out the survey that will magically pop up after the webinar ends. And then finally from the Rustandy and the Stigler Center, Thank you, thank you for being here, and we hope to connect with you again soon.
Investment in diversity and inclusion initiatives—measured by dollars spent and new positions created—has never been higher. While this isn’t a new trend, it is one that picked up steam last year and prompted many to ask what else the business community should do to combat systemic inequality and racism.
“We saw it over and over on television, with our own eyes,” said Paula Price, ’88, referring to the murder of George Floyd, the unrest that followed, and the pandemic’s disproportionate impacts on Black people and other marginalized groups. “If we can witness that and not respond to it, then shame on us.”
Should business do more, and what does “more” look like?
That’s what Price, a public and private company independent board director and strategic advisor, discussed with other business leaders at “Innovating for Social Equity: The Responsibility of the Business Community,” an event hosted by the Rustandy Center for Social Sector Innovation and the Stigler Center for the Study of the Economy and the State. The Rustandy Center event series explores efforts by the philanthropic and private sectors to address the barriers that still prevent our society and economy working for everyone. (The first two examined equity through an investing and philanthropy lens.)
Along with Price, Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at Booth and faculty director of the Stigler Center, and Mark Hoplamazian, ’89, president and CEO of Hyatt Hotels Corporation, tackled this topic in a conversation moderated by Brian Fabes, managing director of Corporate Coalition and civic impact executive in residence at the Rustandy Center and the Harris School of Public Policy.
Business Leaders Taking a Stance on Issues
Some CEOs like Blackrock’s Larry Fink and those in the Business Roundtable have taken a public stance supporting their employees, the environment, and the communities in which they operate. Panelists debated whether business leaders making public statements about the social consequences of a decision borders on the political.
Zingales, who has advanced the idea that firms should maximize shareholders' welfare and not just profits as Milton Friedman asserted, said trying to not be political may lead to more harm than good. Being “apolitical” is another way for corporations to push their own interests over the interests of society at large. “The private interests of businesses may weigh excessively in the decisions made in the political sphere.”
Price said CEOs have the responsibility to be good citizens in the context in which they operate. “If we ever hope to get to human equality, we need leaders of all sorts, including—and perhaps especially—CEOs, to use their voices and their platforms for the greater good,” she said.
Data Shows Diversity is Good for the Bottom Line
Every form of discrimination, in addition to being unethical in and of itself, also amounts to an economic loss in terms of both talent and productivity, Zingales said. “Even if we’re purely interested in the bottom line, there are plenty of reasons we’d want to fight discrimination, racism, and a widening gap in opportunities."
In response to events last year, Hoplamazian said Hyatt created a sharper set of diversity, equity, and inclusion goals around employee representation, supporting community-based organizations, and increasing the number of minority-owned business partners.
“Caring for our own colleagues and guests means having a vibrant economy and a vibrant local community,” he said. “The idea that we can stand by and continue to witness a widening opportunity gap in the economy is extraordinarily short-sighted.”
Moving Beyond Representation to Retention
“Many businesses realize we can improve representation, but you need to not only hire but also retain,” said Price. “To do this, you must focus on inclusivity and equity.” How do you not just get diverse talent, but keep it?
Price is seeing momentum around prioritizing retention. In addition to having pipeline initiatives to bring on employees from underrepresented groups, companies must also support them with programming. She said some companies are reaching out to nonprofit organizations, who have been doing this work well for many years, to benefit from their expertise.
Hiring someone isn’t sufficient; companies need to help their employees keep their jobs, Hoplamazian said. Some of this comes down to the logistics of transportation, for example. That’s why one of Hyatt’s hospitality training programs with Skills for Chicagoland’s Future provides job seekers ages 18 to 26 with three months of free public transportation through Chicago Transit Authority in addition to paid professional development training.
“You need to really understand what’s required to actually put employees in a position where they can be successful,” he said. “This is not a plug and play solution. It takes extra effort, but there’s more impact over time.”