CEOs, Boards Are Urged to Embrace Civil Rights Audits (Correct)

Civil rights audits of major corporations should include the engagement of the chief executive officer and board of directors, a new report argues.

The 45-page paper, sponsored by the Ford Foundation and supported by the Leadership Conference on Civil and Human Rights, sketches out a set of principles for companies that agree to undergo corporate civil rights audits, in which third-party groups analyze the businesses to determine whether they perpetuate discrimination.

Laura Murphy, the author of the report scheduled to be released Oct. 27, argued that audits should go beyond an evaluation of a company’s diversity and inclusion metrics to include its impact in society as a whole.

“Whenever I talk to corporate executives about a civil rights audit, they want to tell me everything they’re doing about diversity, equity and inclusion,” said Murphy, who has conducted audits of Facebook Inc. and Airbnb Inc. “But that really doesn’t really get to the problem, which is, is your product hurting people?”

In addition to involving top executives, companies should also speak with relevant stakeholders including civil rights advocates and organizations during the audit process, according to the report. Audits should be conducted by an independent organization with civil rights expertise that agrees to release the findings publicly, Murphy writes in the report.

Advocacy groups and shareholders are increasingly pushing corporations such as Alphabet Inc.’s Google, Amazon.com Inc. and financial institutions to implement racial audits. In April, BlackRock Inc. agreed to conduct one, while many of its peers on Wall Street have rejected down similar requests.

(Corrects release date in the third paragraph.)

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Naomi Nix in Washington at nnix1@bloomberg.net

To contact the editors responsible for this story:
Jillian Ward at jward56@bloomberg.net

Andrew Pollack

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