fortune--2020-06-18--Alphabet makes big promises about racial equity. But it lacks accountability

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Good morning, Data Sheet readers. Tech writer Danielle Abril here filling in for Adam.
I’ve been watching the growing number of tech companies and CEOs publicly denouncing racial injustice and offering their support for the black community. Most top leaders seem to understand that the time for change is now. And in the tech industry, much change is desperately needed.
But when all the public outrage has died down, one important question remains: How many companies will actually follow through with their promises of change?
Sundar Pichai, CEO of Google’s parent company, Alphabet, has sent two emails to his employees expressing his support for racial equity. The first one came a couple of weeks ago after the rise of nationwide protests following the death George Floyd, a black Minneapolis resident who was killed by a white police officer kneeling on his neck.
In that email, Pichai said that he recognized that the “black community is hurting” and announced a $12 million corporate donation that would go to organizations that address racial inequities. He also said that recent events “reflect deep structural challenges” and promised to develop initiatives and product ideas to support “long-term solutions,” without providing much detail.
On Wednesday, Pichai sent a second email in which he committed to increasing the number of black and minority senior leaders at Google by 30% within the next five years. He also said the company plans to address diversity issues related to hiring, retention, and promotion at Google and to work on creating a “stronger sense of inclusion and belonging” for black employees.
He added that Google is working on product features that could help people find black-owned businesses on Google Search and Google Maps, for example.
While these promises are steps in the right direction, critics say it all sounds too familiar. For years, Google, Facebook, Apple, and others have promised more diversity and improving their products to serve all people. And so far, their results are far from impressive.
To their credit, several big tech companies tried to move the needle. They’ve created employee programs, paid closer attention to how they develop products, and hired passionate chief diversity officers to lead the charge.
But ultimately there’s still no accountability for diversity problems at companies like Google. Unlike missing revenue projections, there is no penalty for failing to hire more minorities or improving the culture at their campuses.
The good news is that the current movement is rattling executives, who may not have considered making some of these changes otherwise. The bad news is it’s going to take a lot more than money and a few promises to create a company culture that not only welcomes a diverse group of employees but includes, supports, and empowers them.
Danielle Abril
@DanielleDigest
danielle.abril@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Everyone: We'd like to edit our tweets.
Twitter:
Literally everyone: We'd really like to edit our tweets.
Twitter:
Twitter: hey, how about audio tweets?
What we've got here is a failure to communicate. Even free users of Zoom's video conferencing service will have their communications fully encrypted, as long as they verify a phone number, the company announced on Wednesday, reversing an earlier decision to limit the security feature to paying users. "We have identified a path forward that balances the legitimate right of all users to privacy and the safety of users on our platform,” says CEO Eric Yuan.
A seat at the table. Online publisher Medium said former NFL quarterback Colin Kaepernick was joining its board of directors and starting a unit focused on race and civil rights in America called Kaepernick Publishing. Kaepernick said his goal is "creating new opportunities and avenues for Black writers and creators with my new role as a Board member."
Your barn door is showing. Bitcoin has many legitimate uses, but it's also used by drug dealers, which means a lot of cryptocurrency ends up in the virtual hands of agents from the Drug Enforcement Administration. A new report from the DOJ's Inspector general says that's a big risk, as the agency doesn't have proper safeguards in place for handling digital currency. The report comes five years after one agent tried to steal $700,000 of bitcoin from the Silk Road investigation.
Sour candy. We've identified the second top former eBay executive involved in this week's bananas criminal cyber-harassment scandal. "Executive 2," who took former CEO Devin Wenig's complaints about a small news site to the company's head of security for some kind of action ("I want to see ashes...whatever it takes."), was former chief communications officer Steve Wyman. Wyman, who was not charged in the complaint, has not resurfaced since eBay let him go last fall and did not respond to a message from me on LinkedIn.
Look ma, no hands. Self-driving cars are still a ways off, but Ford is adding "hands-free driving" to its Co-Pilot360 software that will be included with its upcoming Mustang Mach-E electric car and some other 2021 models. The software will be able to handle full driving functions on about 100,000 miles of pre-mapped divided highways in the United States and Canada.
FOOD FOR THOUGHT
As Apple gears up for its annual developer conference WWDC next week, the company is getting exactly the wrong kind of publicity. Software developer Basecamp says Apple is squeezing them for a share of the subscription revenue from their new premium email service called Hey, even though they don't sell subscriptions on Hey's iPhone app. Apple says it is seeking money from apps it considers a consumer service, though it hasn't gone after Netflix or Amazon's Kindle. Longtime Apple watcher John Gruber says Apple's policy makes no sense.
At some level there’s a clear distinction here — Netflix and Kindle are clearly consumption services. But Dropbox? Dropbox is a lot closer to an email or messaging service like Hey than it is to Netflix or Kindle. The stuff in my Dropbox account is every bit as personal as the stuff in my email account. When you put Dropbox in the same bucket with Netflix and Amazon Kindle, it seems to me like the distinction is not so much between what is and isn’t a “reader” app or what is or isn’t a “business” app, but between companies which are too big for Apple to push around and those they can.
The tragedy here is that Apple, since its inception, exemplified the folly of such distinctions. The Apple II and Macintosh weren’t consumer/toy computers in answer to ostensibly professional/serious computers from suit-and-tie companies like IBM. Apple’s own hardware and software showed that such distinctions were not just unnecessary, but were harmful, holding back the entire industry under artificial signifiers of “seriousness” that were every bit as much bullshit when it came to how computers looked and worked as was how the employees of the companies that made them dressed for work.
IN CASE YOU MISSED IT
How The Engine’s Katie Rae is addressing racism in VC By Maria Aspan
How Google and Facebook’s 8,000-mile undersea data cable got caught in U.S.-China feud By Naomi Xu Elegant
Fortune survey: 62% of CEOs plan policy changes in response to current calls for racial justice By Lance Lambert
Facebook and Instagram to let users switch off political ads By Danielle Abril
How the first-ever digital ADHD treatment—a video game—got the FDA’s blessing By Sy Mukherjee
Digital healthcare is all the rage in COVID-19 times. But not everyone is invited to the party By Lucinda Shen
Cheaper 5G phones are on the way. Here’s how much they’ll cost By Aaron Pressman
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
We're just about a month away from the launch of NASA's next Mars rover mission. The Perseverance is scheduled to leave Earth on July 20 and land on the red planet next February. It's got an entirely new trick up its metal sleeves: a helicopter-like drone that will fly around the Martian skies. NASA this week released some video related to the mission, including simulated footage of the drone flying around Mars (it starts at the 9-minute mark).
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-06-18--Why Stacey Abrams sees reason for optimism in the Georgia primary voting mess

There is no shortage of black talent in corporate America

Good morning, Broadsheet readers! Quaker Oats finally retires its “Aunt Jemima” branding, Patty Quillin and Reed Hastings make a historic donation to HBCUs, and we talk with Stacey Abrams. Have a lovely Thursday.
– ‘Progress is possible.’ One-time Georgia gubernatorial candidate and voting rights advocate Stacey Abrams, a Democrat, has a new book out and Emma interviewed her about it.
Abrams’s new title, Our Time Is Now, is landing in the midst of three enormous, simultaneous crises: the coronavirus pandemic, the societal unrest and upheaval over police brutality and racial inequality, and the growing concern about voting access in the 2020 U.S. presidential election. Emma’s exchange with Abrams covers all three topics and starkly illustrates the overlap between them.
The pandemic, Abrams says, threatens to force voters in November to “choose between their health and the right to vote.” What’s urgently needed are resources for vote-by-mail and early voting efforts. “It is a constitutional requirement that we hold this election, therefore this is a responsibility on the part of the federal government to invest in making sure those elections can happen,” she said.
Voting has become a flashpoint in the ongoing protest movement as some leaders—former President Barack Obama included—have urged demonstrators to vote for the change they want to see. The advice has drawn some skepticism. “Going to vote is a critical part of the solution—it’s just not the only thing,” Abrams said. “Voting is an essential part of the solution,” but it can feel inadequate, especially when floated as a protest alternative. Her advice: “protest in the streets, and then protest at the ballot boxes.”
Abrams’s 2018 loss in Georgia’s gubernatorial race came in an election tainted by accusations that her opponent engaged in voter suppression. That experience “was emblematic of a larger problem in our country,” she said, one that was underscored by Georgia’s recent primary debacle. The meltdown, in which voting machines broke and voters waited in hours-long lines, signaled “that this wasn’t just about a single election,” she said. “The system itself is not structured to deliver the democracy it should.”
Even with the plain failings of the Georgia primary, Abrams saw reason for optimism, with Democrats reporting record turnout. It showed “that progress is possible, especially when we don’t allow voter suppression to defeat us and instead use it to galvanize us. That record turnout did not diminish the existence of suppression, but it challenged it. We have the power now to demand better.”
You can read Emma’s full interview—including Abrams’s response to the perennial Biden VP question—here.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Overdue update. Quaker Oats, a subsidiary of PepsiCo, announced yesterday that it would rename and remove the logo from its 130-year-old Aunt Jemima breakfast brand. The name and image had overt ties to American slavery, reports Fortune's Beth Kowitt. Quaker Foods North America CMO Kristin Kroepfl said that the company realizes that changes it has attempted in recent decades to "update" the brand "are not enough." Fortune
- UN guidance. UN leaders—human rights chief Michelle Bachelet and Agnès Callamard, a human rights expert who led the UN inquiry into the murder of journalist Jamal Khashoggi—weighed in on the protests roiling the globe right now. Bachelet urges countries confronting legacies of slavery or colonialism to pay financial reparations, while Callamard says the U.S. should listen to protesters' demands.
- Historic donation. Philanthropist Patty Quillin joined her husband, Netflix CEO Reed Hastings, in donating $120 million to fund scholarships at historically black colleges and universities. Spelman College president Mary Schmidt Campbell said in this story by Fortune's Ellen McGirt that the gift shows the couple's commitment to "education, equity, and the future of our country." Fortune
- North Korea news. Kim Yo-jong, sister of Kim Jong-un, issued a statement that shows her growing clout in North Korea. She said she would "prepare a bomb of words to let it known to our people" after hearing a speech by South Korean President Moon Jae-in that she called "sickening." "Few leaders other than [Kim Jong-un] can issue first-person statements like that," reports the NYT. New York Times
MOVERS AND SHAKERS: Gucci parent Kering added actor Emma Watson and Didi Chuxing president Jean Liu to its board of directors; Watson will chair a committee on sustainability. Twitter general counsel Vijaya Gadde joins the board of Guardant Health. Lifehacker promoted Alice Bradley to editor-in-chief. GO Topeka promoted SVP of women and minority business development Glenda Washington to chief equity and opportunity officer.
IN CASE YOU MISSED IT
- Test results. The startup Modern Fertility is introducing new pregnancy and ovulation tests that make an intentional choice: neither features a cute baby anywhere. The company led by CEO Afton Vechery made the decision after a survey of users of its at-home hormone fertility test found that 75% were not currently trying to get pregnant. Fortune
- Protesting protest decisions. Alexis Johnson, a black reporter for the Pittsburgh Post-Gazette, was barred from covering the city's protests after tweeting a comparison of any destruction caused by protests or looting to the usual damage after an annual Kenny Chesney concert. Johnson denies that she showed any bias and is now suing the paper for racial discrimination and retaliation. The Post-Gazette declined to comment. Time
- Crisis's crisis. What happened at Crisis Text Line? This story investigates the circumstances that led to the firing of Nancy Lublin as CEO. Employees had complained about Lublin's behavior—which they said included racially insensitive comments—to the board of directors but never got a response. Employees also tried with little success to reform Crisis Text Line's practice of automatically sending the police to the house of a user believed to be actively suicidal. A spokesperson for Lublin said, "Many of the complaints about Nancy are coming from disgruntled and anonymous former employees." The Verge
- Positive spin. Fortune's Adam Lashinsky interviewed Robin Arzón about her transition from a litigator at law firm Paul Weiss to her current role as Peloton's vice president of fitness programming and head instructor. "We tend to think of the Jerry Maguire moment where you throw the books on the floor and everything changes," she said. "But our journeys don’t work like that." Fortune
ON MY RADAR
The Zora Music Canon: The 100 most iconic albums by African American women Zora
Serena Williams commits to U.S. Open Guardian
Carol Barr, wife of U.S. Rep Andy Barr, dies at 39 Lexington Herald-Leader
PARTING WORDS
"You literally think to yourself, are we serious here? It's 2020."
-Katie Rae, CEO and managing partner of The Engine, a venture capital firm spun out of MIT, on the lack of venture capital funding that goes to black founders


fortune--2020-06-19--The founder of paint supply startup Clare on how to use your brand as a social platform

IBM ’ s Ginni Rometty : The way we hire must change—and we must do it now

This is an installment of Startup Year One, a special series of interviews with founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
As the popularity of HGTV and countless home renovation shows on Netflix have demonstrated, many people find it fun to imagine revamping a room or an entire house. Obviously, it’s not as easy as it looks, and as anyone who has redecorated a space can tell you, picking just the right color for walls can be frustrating and painting them often monotonous.
But Nicole Gibbons, an interior designer and founder of paint supply startup Clare, saw a staid industry ripe for reinvention itself. Clare was founded in July 2018 with the intention of not only making paint shopping fun, but easier than ever. Clare’s swatches can be stuck to the wall and peeled off, so you can actually back up and get a better look.
More recently, Gibbons has been leading her team and using her voice and platform to educate on matters of race as a black female entrepreneur. Earlier this month, she posted to Clare’s Instagram account, versus a personal account, to speak to the brand’s followers and customers with information about how allies can educate themselves, which was met with an overwhelming response from those in the design industry.
Since then, she has continued to post resources on Clare’s Instagram Stories to drive the conversation forward. Gibbons spoke with Fortune recently to share more about her company ahead of its second anniversary, her decision to use her brand as a platform, and her experience thus far as a black female founder in an industry that lacks diversity.
This interview has been lightly edited and condensed for clarity.
Nicole Gibbons, founder of Clare Courtesy of Clare Paint
Fortune: The paint industry might not seem like the flashiest space for a startup to disrupt. What inspired the launch of Clare?
Gibbons: As an interior designer, I saw firsthand how people who did not have the opportunity to work with a designer struggled with the process of buying paint. The experience has traditionally been full of hassle with thousands of colors, confusing product lines, messy sampling, and a cumbersome customer journey that requires back-and-forth trips to the store.
With such a frustrating and overwhelming process, there was no brand offering an easy way for people to pick a color, buy paint and supplies, and get tips to tackle their paint project with confidence. So I decided to tackle this problem and create a better paint brand with an easier, more convenient, and more inspiring shopping experience.
The startup’s mission is to make paint shopping easier as well as more fun and inspiring. Courtesy of Clare
With the pandemic shutdowns, many consumers have been spending more time at home than ever. I’ve heard from a few friends and colleagues that this time period has given them the opportunity to decorate their otherwise empty apartments. Have you been seeing any similar trends at Clare? What has supply and demand been like over the past several weeks compared with pre-pandemic?
We’re seeing lots of people tackling DIY projects during this time. Some are finally getting around to long-delayed projects they’ve been putting off, and others are getting inspired to take on new projects to improve their spaces now that they’re spending more time at home than ever before.
While the pandemic started out with a lot of uncertainty, we’ve seen an increase in demand that’s up [nearly] 100% from our pre-pandemic months. We’re also quite lucky that our domestic supply chain has been relatively unaffected. We experienced minor fulfillment delays of an additional one to two days for orders but are now fulfilling as normal, and we’ve also been able to replenish inventory without disruption.
Even though the products are intended for interiors, Clare’s paints seem like they’re made to be seen by the wider world. The marketing style of the company on Instagram, especially, plays into a younger, lighter aesthetic. How has technology shaped the development of Clare?
One thing that was missing from the old-school way of paint shopping was a seamless e-commerce experience. And with our brand being entirely online, technology powers everything we do, from running our online storefront to creating technology, such as our Clare Color Genius tool, which helps you find your perfect paint color. Our Instagram and other social media platforms are a great way to showcase and market our paint colors and products to consumers. People love seeing examples of our products in real spaces which helps aid in their purchasing decisions.
Clare’s team has reviewed hundreds of colors to create a tried-and-true palette that takes the guesswork out of finding just the right color. Courtesy of Clare
Over the past few weeks, there has been a much stronger and more concerted effort on social media to encourage consumers to support black-owned businesses. At the same time, there is the worry that while this might offer a much-needed sales bump during an economic downturn, nonblack consumers will not commit to this effort in the long term. What can other members of the business community do to amplify and sustain support for black-owned businesses?
To have a large-scale and sustained positive impact on black businesses, we need more large corporations getting behind the issue. And the support needs to go above and beyond condemning racism and making hollow statements of solidarity on their social media pages. Retailers need to commit to sourcing more products from black-owned businesses and putting them on their shelves.
This puts the products in front of more consumers and, in turn, helps create more wealth for these black-owned businesses and their communities. This ultimately addresses some of the more systemic issues that have suppressed black wealth and contributed to greater racial inequity for centuries.
You’ve already been using your Instagram account as a platform to educate followers on matters of race as a black female entrepreneur, providing vital information about how allies can educate themselves as well as suggestions on where to make charitable donations. Within your company, what has the response been like, and how have you been encouraging your employees to participate in social change?
We’re a small company, and our team is incredibly diverse, so I think the way we’ve tackled the race issue within our company is unique. I’m a black, female CEO, and four of our five payrolled employees are people of color. We’ve had lots of long discussions about race, and we’re all on the same page on the issues, so I haven’t had to encourage them to participate in social change—they’re doing it on their own.
Individual members of our team are using their personal social media platforms to amplify the Black Lives Matter movement and demonstrate their support and allyship. We’re also thinking through ways Clare can make an impact on a larger scale, outside of using the brand as an awareness platform.
Clare’s paint supply seems ready-made for the Pinterest and Instagram user looking to redecorate. Courtesy of Clare
Looking beyond the post-pandemic era—which could be anywhere from a year to a few years from now—how do you plan to grow Clare, and what do you want the business to look like five years from now?
We’ve successfully pioneered a new model for paint shopping and are delivering a best-in-class online experience. So right now we’re focused on continuing to optimize our e-commerce channel. But in the future, the plan is to expand our product assortment and diversify our distribution channels including bringing our shopping experience to bricks and mortar.


fortune--2020-06-19--A ‘rogue employee,’ forged signatures: investors bail on Wirecard as the case of the missing billion

A ‘rogue employee,’ forged signatures: investors bail on Wirecard as the case of the missing billions intensifies

Wirecard AG shares continued their free-fall after the two Asian banks that were supposed to be holding €1.9 billion ($2.1 billion) of missing cash denied any business relationship with the German payments company.
Wirecard now faces a potential cash crunch. The company warned Thursday that loans up to €2 billion could be terminated if its audited annual report was not published on Friday. Analysts at Morgan Stanley estimated that Wirecard has available cash of around 220 million euros, if it cannot locate the missing $2.1 billion.
“It was a rogue employee who falsified documents and forged the signatures of our officers,” BDO Unibank Chief Executive Officer Nestor Tan said in a mobile phone message. “Wirecard is not even a depositor — we have no relationship with them”.
The Bank of the Philippine Islands said in a separate statement that Wirecard isn’t a client and it continues to investigate the issue.
Wirecard shares plunged 24% at 9:11 a.m. in Frankfurt on Friday, taking the stock’s losses to 71% since Wednesday’s close. The company that was worth 24.6 billion euros in September 2018 when it entered Germany’s Dax index is currently valued at about 3.4 billion euros.
The denials from BDO and BPI follow a statement on Thursday from Wirecard, which claimed that auditor Ernst & Young couldn’t confirm the location of the missing cash that was supposed to be held in Asian banks and reported that “spurious balance confirmations” had been provided.
BDO has reported the Wirecard issue to Bangko Sentral ng Pilipinas, the Philippines central bank, Tan said.
The crisis has engulfed Wirecard in recent days. The payments company suffered one of the worst stock slumps in the history of Germany’s benchmark index after warning that as much as 2 billion euros in loans could be called due if its audited annual report, delayed for the fourth time, was not published by June 19.
Wirecard spokespeople did not immediately return calls and emails for comment.
Read More: Wirecard Suspends Executive After $2.1 Billion Goes Missing
Wirecard Chief Executive Officer Markus Braun has painted the company as a potential victim. The CEO has been resisting calls to resign and aggressively defending the company against accusations of accounting fraud, led by a series of articles in the Financial Times.
“It cannot be ruled out that Wirecard has been the victim in a substantial case of fraud,” Braun said in a statement published overnight.
The company temporarily suspended its outgoing Chief Operating Officer Jan Marsalek, it said in a statement late Thursday. Marsalek — who has been suspended on a revocable basis until June 30 — had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but wasn’t successful, a person familiar with the matter said Thursday. It’s unclear if the funds can be recovered, the person added.
“Given the magnitude of the cash balances in question, new creditor risks and severity of the share price drop, we believe these board changes are unlikely to be enough to restore market confidence in the near-term,” said Robert Lamb, analyst at Citigroup, in a note Friday.


fortune--2020-06-19--Black employees say performative allyship is rampant in the office

As racist practices in some workplaces have come to light, companies are under scrutiny for how they’re practicing allyship. Certainly posting a black square to Instagram is not enough. As organizations speak out against racial injustice, many have been accused of “performative allyship”—condemning racism through broad gestures but enabling its effects in their own workplaces.
Black employees from across industries told Fortune that they’re keenly familiar with such optical allyship. They say their companies speak out in support of racial equality but don’t hire black executives or equally pay black employees, don’t listen to their concerns regarding discrimination, or were completely silent about racism up until now. They have stories of affirming individuals and gestures, but those are much fewer and farther between.
Their point is clear: Companies may invest in showing customers that they care about issues affecting black Americans, but those acts are meaningless if they don’t invest in their black employees as well. They may make a splashy announcement about a Juneteenth company holiday, but the way they treat their black employees when they return on Monday matters just as much, if not more.
We’re not done documenting experiences. If you have an anecdote to share, please submit your thoughts here. For more stories, subscribe to raceAhead, our newsletter on race in corporate America.
The responses have been lightly edited. We’ve published only first names to respect the privacy of the contributors.
I spent the past three years in private banking in a city most notably known for being non-diverse. I have a number of stories, but the one that sticks most is when my bank was under public scrutiny for racist acts. They put out a well-written statement internally. Days passed with no commentary or check-ins on how I felt about the matter from any of my coworkers. Not one. Then one day, following a national call where the CEO addressed the headlines, I was pulled into a room by the managing director and asked, “So do I call you black or do I call you African-American?” Stunned, I said, “The respectful thing to do would be to call me, and anyone that identifies this way for that matter, African-American.” Which was met with, “Well, I’m hiring another black woman. I listened to you. You’re welcome.” —Monica, 25
Authentic inclusivity in my workplace does not exist; performative allyship abounds. Asking staff to recast the organization’s work in ways that “could be seen as having a racial justice lens,” when you have not historically applied a racial justice lens, is performative allyship. Using words to sway external black stakeholders in printed press releases, public statements, or on the website is performative allyship. Prioritizing the concerns of external black stakeholders while not being attentive to those of internal black staff is performative allyship. —Ricshawn, 46
When black people want to speak about their experience…just listen. Don’t try and solve; just listen. Most of the time, they just want to be heard and acknowledged. — Alex, 56
Since Mr. Floyd’s death, we have had a few Dialogue Circles, and all are welcome to attend. It’s been therapeutic for me. Our executive council hosted a conversation, and we openly talked about racism, white privilege, and discrimination. Most employees supported their effort, while a few posted insensitive questions. Still, I appreciate our leaders for taking a stance and acknowledging there is a lot more work to do and that they are willing to step up and lead the way. My company has always been one to cautiously tread the political waters, but I knew this was different. Our CEO has spoken out publicly a few times in support of BLM, protesting, and the change desperately needed in the U.S. —Adrienne, 49
While working at a women-led company, I became fully aware of what racism looked like in a workplace setting. If all your managers and executive team members are white, but you’re telling your customers you are all for women’s rights and inclusivity, you are lying, simply put. We have to see it within the company first before you can speak about it and use it for marketing to gain customers. —Brianna, 33
I’m so glad that you are digging in to learn more and are invested in growth and anti-racist education. But please stop sending me every article, podcast, and video you check out. I’m not going to give you a cookie, and I never signed up to be the official librarian for our company. I have a lot of work to do and don’t care to participate in every webinar you hear about. Tell your white coworkers about it. Please. —Carrie, 35
It is not about a slogan or a hashtag. Many corporations have been complicit, and the evidence is clear by looking at the lack of black faces in their senior leadership teams and boards. This moment requires honest self-examination and making room and advancement opportunities for qualified black colleagues. Laws and policies, while necessary, will not eradicate racism. The answer lies in people making a choice to behave differently and addressing even the smallest acts of racism or microaggressions in their sphere of influence. —LaToya, 44
I worked in a company of approximately 1,000 employees, of which only two to four African American employees were in management, and none were in senior management. The president would always state at his management retreats that he hated discrimination. My message to him would be to walk the walk. Put some people of color on that senior management team—more than one. Now is the time for him to make a difference. —Lynn, 60
Think about the words being used at work that don’t include all races. —LaTanya, 42
I would like for white people to stop expecting me to speak for an entire race. Stop trying to explain racism to me when I live it daily. Stop acting as if this is something new. Racism was rampant last month, last year, and the century before that. Realize that my “living my best life” could get me killed. And no, you do not understand. An HR staff person actually said “enough already” regarding BLM. —Dee, 55
I left a job that I was good at because management created an environment so wrought with microaggressions that I doubted everything about myself including my excellence and my worth. The company encouraged everyone to bring their full selves to work, but in reality, the culture only embraced “whites who bike.” My concerns were largely met with dismissal by leadership who were too timid to attribute my experience to discrimination and were uninterested in real change that fostered an inclusive environment. Emotionally drained, I left the job recently, but the scars and trauma remain close to the surface. I am slow to trust, am hypervigilant, and so hurt by how I was treated. I find it pretty funny that now that Black Lives Matter is the topic du jour, the same people who were complicit in my misery are now reaching out to “check on me” and to start a dialogue. —C, 35
We have to advocate for ourselves, and we’re made to feel we’re asking for far too much. Real allyship is as rare as a desert oasis. Example: A new CRO hired a white woman to work under me for 30% more pay. My manager used a rote Google search to address my concerns until I went to the head of HR myself. Three weeks after I was given back pay and promoted, I was laid off. —Racquel, 30
One white woman has directly advocated for me to managers. She has facilitated wider conversations about race because she knows people will listen to her. She takes the stage and gives it to me and the two other black people in our office. She has given me advice. She has bought me coffee on rough days recently. She realizes she can’t solve everything, but she tries and does what she can and is open to critique on herself. But this is one person. No one else has been like this.
People send me messages asking me if they can do anything, but I hardly know them. They just know I am the black one on the West Coast team. One man asked me if I have “recovered” since we last spoke two weeks ago. No, I have not recovered from hundreds of years of abuse of my people and my attempt to keep working so I can keep surviving in this city. —Nia, 25
There are too many missed opportunities by white people to become allies. It’s great if you want to be an ally, but we need to know that you have our back when we need it most and will not back down or shy away from the difficult conversations that take place when it comes to promoting black people. At my age, I should not have to wonder if I will be able to retire in less than 20 years, but it is a constant struggle just to be seen. —Tonja, 49
Allyship is not just about intent; it requires proactive action. Saying you are not racist is not an action. Saying you want to help, but you don’t know how to is not an action. Asking the oppressed to educate you about the well-researched, well-documented issues that are oppressing them is not an action. Letting your privilege go unchecked is not an action. Being silent is not an action.
Change starts with you as an individual and then becomes collective. But you must want the change. Those who benefit from systemic discrimination are fighting just as hard to keep certain biased laws and policies in place as those who are trying to dismantle them. But are you willing to continue benefiting from something that hurts or literally kills someone else? The answer should be an emphatic no. Think about what changes you can make to support your colleagues, family, and friends who are feeling frustrated and like every odd is against them. You have a duty as a human being to do better for them. —Amber, 30
That you do not use the so-called “N-word” does not mean you are not a racist, and saying you are not racist does not absolve you of being aware and accountable for your casual and subtle racist behavior. —Oneita, 51
Two stories on allyship: A senior executive gave us a ride back from a meeting, and his radio was blaring a live Trump rally. This was a full bit on ungrateful NFL players kneeling. I could sense the white people in the car were as uncomfortable as me, but no one said anything. Finally, as I couldn’t take it anymore, I put in my earbuds.
A white male executive I’ve been friendly with whispered to me in a meeting that we were in the minority because everyone else in the room was a woman. I whispered back, “Welcome to my everyday experience.” He was stunned and apologized that he never thought of it before. —Joe, 43


fortune--2020-06-19--Top executives are delighted about the Supreme Court’s DACA decision

The founder of paint supply startup Clare on how to use your brand as a social platform

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Top executives had another reason to speak out yesterday, after a Supreme Court decision that leaves in place the Obama-era immigration program known as Deferred Action for Childhood Arrivals, or DACA. “The 478 Dreamers at Apple are members of our collective family…We’re glad for today’s decision,” said Apple’s Tim Cook. “Today’s SCOTUS decision is a victory for the country,” tweeted Microsoft President Brad Smith. And IBM Executive Chair Ginni Rometty told a virtual gathering of Fortune’s Most Powerful Women: “It’s a great day for the world.”
Rometty also made some predictions about how the world of work will change in the post-COVID era:
“I think very clearly there will be a hybrid work model in the future. There is a role for being in an office. Innovation and culture suffer otherwise. What we envision is: Does the office become an innovation hub? Our real estate assumptions profoundly change.”
Separately, since it’s Friday, some feedback. Tuesday’s post and podcast on GM’s Mary Barra brought in diverse responses:
“This is why Mary Barra is my choice for VP.”
–J.P.
“It is all well and good that she is pushing for more equality and justice, but she is neither a politician nor head of a non-profit. She is the CEO of GM and a very cursory review of GM’s performance shows she has not succeeded in the 6 years she has had the helm.”
–T.H.
And on Dow CEO Jim Fitterling’s commitment to the environment, I received this:
“’What targets and timeline have you been provided that will allow you to maximize your earnings under your current compensation plan as it relates to the sustainability plan?’” – That’s the question I would have loved to have you ask the Dow CEO.”
–J.H.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Many companies have made splashy announcements about Juneteenth company holidays, but the way they treat their black employees when they return on Monday matters just as much, if not more. Fortune has compiled stories from black employees across industries that reveal what their experiences in corporate America are like. It’s clear: No matter what companies are doing to take a stand against racial inequality right now, there is much more work to be done.
TOP NEWS
China decoupling
President Trump has threatened a "complete decoupling" of the U.S. and Chinese economies—a repudiation of U.S. Trade Representative Robert Lighthizer's assertion that full decoupling was not "a reasonable policy option." "Perhaps I didn't make myself clear," Trump tweeted, "but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China. Thank you!" The markets have, so far, not reacted noticeably. Fortune
Trump ads
Facebook has removed some of President Trump's re-election campaign posts and ads because they included a Nazi symbol: specifically, an inverted red triangle that the Nazis used to designate political prisoners in concentration camps. The Trump campaign claims the symbol is used by Antifa, a loose, leaderless movement that the president often rails against—that would be ironic, given that "Antifa" is short for "anti-fascist". Wall Street Journal
Wirecard cash
Shares in the controversial German fintech firm Wirecard continue to plummet after an E&Y audit showed it's missing $2.1 billion. The cash was supposedly being held by two banks in the Philippines, both of which say Wirecard actually isn't a client or depositor—one claims a "rogue employee" falsified documents. The company's stock price has fallen more than 70% since Wednesday's close, before the audit's results were announced. Bloomberg
Plane masks
U.S. airlines' quest to get passengers to wear face masks is gathering pace. American Airlines on Wednesday banned Brandon Straka—a conservative activist who got thrown off an American flight Wednesday for refused to mask up—from using its services until the face coverings are no longer required. The carrier said: "We expect customers who choose to fly with us to comply with these policies, and if necessary, we will deny future travel for customers who refuse to do so." Fortune
If you were to assemble the people who could help you truly understand health care and how it’s affected businesses today, who would you pick? Here’s a few on Fortune’s list:
—The CEOs and presidents of healthcare giants Johnson & Johnson, Moderna, Novartis, Aetna
—co-discoverer of CRISPR-Cas9 Dr. Jennifer Doudna
—Dean of Stanford Medicine Dr. Lloyd Minor
—chief medical officers from IBM, Verily, Google Health
—healthcare venture capitalists like Sue Siegel
—Thrive Global CEO Arianna Huffington
—CEO of REFORM Alliance Van Jones
—NBA Commissioner Adam Silver
Hear from them and more at Fortune Brainstorm Health, our virtual health-care conference on July 7-8. As a newsletter subscriber, you’re invited to use this code—BSH20HALF—and get half off.
AROUND THE WATER COOLER
Beyond Juneteenth
"I have spent most of my professional career staying relatively quiet about how race has impacted my life, because it is a deeply personal topic," Cadre CEO Ryan Williams writes for Fortune, in a call for sustained, structural investments in underserved communities. "But in the past few weeks, I’ve realized that my role provides me a platform to share my experiences, personalize the pain witnessed by so many, and be a voice for change." Fortune
German diversity
The management and executive boards of Germany's biggest companies are almost exclusively white (and overwhelmingly male). And the fact that this is still the case, after many years of talking about more diversity, is partly down to a lack of data—Germans are very loath to talk about race, and do not collect the racial information that experts say is needed to demonstrate the problem. Fortune
Klobuchar out
Amy Klobuchar has taken herself out of consideration to be Joe Biden's running mate, because she thinks the Democrats should rather run alongside a woman of color. "This is a historic moment, and America must seize on this moment," she said last night. "And I truly believe as, I actually told the vice president last night when I called him, that I think this is a moment to put a woman of color on that ticket." CNN
Digital tax
The U.K., France, Italy and Spain have urged the U.S. to accept the need for a "digital tax" on Big Tech. The digital tax concept involved forcing large online multinationals such as Google and Facebook to pay tax locally on the revenues they earn in each country. The U.S. just walked away from multilateral talks on the matter, but the European letter said "the current Covid-19 crisis has confirmed the need to deliver a fair and consistent allocation of profit made by multinationals operating without—or with little—physical taxable presence." BBC
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-19--Corporate Germany has a race problem—and a lack of data is not helping

Earlier this month, the killing of George Floyd in the U.S. sparked massive anti-racism protests around Germany. But those tens of thousands of people did not just take to the streets out of solidarity; many were protesting structural racism in Germany itself.
Some of this structural racism manifests itself in police behavior, as is the case in the U.S. But it is also readily apparent when looking at corporate Germany.
There are 179 people on the management or executive boards of Germany’s 29 Fortune Global 500 companies. Just two of them are not white—both hailing from South Asia—and none is black. In fact, Germany has only had one prominent black executive in recent times: Siemens’s chief human resources officer, Janina Kugel. And she left the company last year to become a consultant.
“When we see diverse leadership, people who are nonwhite in huge companies, they are normally in visible positions and most of the time in diversity and inclusion positions,” says Daniel Gyamerah, who leads the antidiscrimination team at the Berlin-based think tank Citizens for Europe. “The technical term is ‘token’…[but] in Germany we’re not even there. The pressure to at least have a signal that you are a racially diverse company is not even that high in Germany.”
And why is that pressure lacking? It’s partly because of a lack of data.
Avoiding the subject
Germany, unsurprisingly given the darker chapters of its history—Nazi eugenics; Namibian genocide—is extremely squeamish about the topic of race. People even steer clear of the German word for race (Rasse) because of its connotations as a biological rather than social construct; the word also refers to animal breeds.
“Many companies talk about ethnic diversity, which is a different thing,” says diversity and inclusion consultant Floria Moghimi. “They talk about internationality, which is another different thing. People are so afraid to use the word ‘race.’”
Accordingly, the German authorities also do not collect racial demographic data, so nobody is quite sure how many people of color there are in the country, whose total population is around 83 million.
The only useful data for counting minorities comes from Germany’s “microcensus” tabulation of people’s migration background. From this, we can deduce that a couple of years ago there were nearly 4.5 million people in Germany of first- or second-generation Middle-Eastern or Asian background, and 936,000 people who were either first- or second-generation immigrants from Africa.
“This does not include the third, fourth or fifth generation, or black people from the U.S. or France who live in Germany, so it’s a conservative estimation,” says Gyamerah.
So while it is easy to contrast the fact that African-Americans make up 13.4% of the U.S. population with the fact that there are just five black CEOs in the Fortune 500 and conclude that black people are heavily underrepresented in the top ranks of corporate America, the problem is not so easily identified in Germany, Europe’s largest economy.
“It’s standard in the U.S. to have data about racial justice. We don’t have that at all in Germany,” says Gyamerah. “We don’t even have the discourse…We have more than a million people of African descent, but there is no quantitative research about these communities.
“One reason of course is German history,” says Gyamerah. “But the much more important one is the lack of a structural understanding of racism. If you lack that understanding then you don’t come to the conclusion that you need the data.”
Moghimi points to the usefulness of such data in the British context. “The discussion is on another level [in the U.K.] because we have data on BAME [black, Asian, and minority ethnic] employees there, and you can combine those data with other diversity dimensions, for example, gender,” she says. “It becomes really obvious that women of color definitely find it harder to get the same salary or leadership positions as their white counterparts. It’s visible because there’s data.”
Citizens for Europe and several other organizations—with the support of Germany’s Federal Antidiscrimination Agency—are about to try to at least partially close Germany’s data gap with an online survey called Afrozensus. It’s not a headcount, Gyamerah says, but rather an attempt to “provide a differentiated picture about the experiences of black people in Germany.”
“It will give those people who are interested in improving their business—and legislators—a better understanding of what the actual challenges on the ground are,” he says, explaining that companies wanting to become more diverse will have “facts on the table” to help them better understand black people who apply for a position.
Rising discrimination
According to Bernhard Franke, the head of the Federal Antidiscrimination Agency, 23% of those with a statistical “migration background” say they have experienced discrimination of some sort in the past two years.
“Complaints about racial discrimination have doubled in the past five years, and most of them concern experiences in the workplace or while seeking jobs. Still, we believe that our numbers reveal just a fraction of the discrimination that likely occurs,” Franke says.
He puts the increase down to both “a harsher political and social climate where unabashed racism has become more visible”—the far-right Alternative for Germany (AfD) Party is currently the official opposition in Germany’s Parliament—and a greater awareness of racism, making people more likely to make an official complaint.
But some potentially discriminatory practices are deeply entrenched.
“Many HR departments still require [résumés] to come with a photo and full personal information, which is why our agency has long argued for anonymizing recruitment procedures,” Franke says. “Diversity in the workplace must be more than window dressing. Many companies have been doing great work on this, but there is still a long way to go.”
Franke, like Gyamerah and Moghimi, also notes that Germany has relatively weak and poorly enforced equality legislation.
“It puts the onus completely on the individuals affected who have to take their cases to court and have relatively little time to do so,” Franke complains. “There is no collective action clause, and our agency has only very limited investigative powers. If we are serious about the fight against racism we also have to take a critical look at the legal toolbox.”
Germany has no race-based quota systems, but it has for the past four years had a 30% quota for women on large companies’ supervisory boards. As a result, just over 35% of those supervisory board positions at the country’s biggest 100 companies are now filled by women.
But look at management and executive boards, where there is no legal quota, and the picture is quite different. Across the 29 German Fortune Global 500 companies, women hold just 13.4% of those seats.
“In Germany there is a strong discourse about implementing quotas in large companies for gender equality, and there’s still no good representation of women at all levels,” says Gyamerah. “Of course, if people are held back by structural racism, we also need the same legislation for racial equality. But we know even the legislation for gender equality is not enough right now.”
Years of talking
Corporate Germany may not have made sufficient strides toward equality, in the absence of being forced to, but it hasn’t entirely ignored the issue either.
For the past 14 years, an organization called the Diversity Charter—of which Chancellor Angela Merkel is a patron—has provided a forum for companies and other organizations to discuss such issues and share ideas on the way forward. Around 3,500 organizations have signed up.
“I think a lot of progress has been made. There are a lot of best practices,” says spokesman Stephan Dirschl. “We have had a lot of input on how to improve diversity today.” But even he readily acknowledges that the charter’s signatories “have just started with diversity management,” and “far too little is happening, especially in the management levels of large corporations.”
“We need to convince more organizations to put the right people on the boards,” Dirschl says. “We need more role models.”
According to Gyamerah, a possible solution—apart from new legislation—could lie in the creation of leadership pipelines for people of color.
“We need high-level leadership training that focuses on black people and people of color in Germany, not internationally,” Gyamerah says. “We know the leadership so far don’t have enough people at the table who reflect these experiences. We need pipelines to help them access these tables.”


fortune--2020-06-19--The insurance case that helped end the slave trade

The recent Black Lives Matter protests in the U.K., sparked initially by George Floyd’s killing in the U.S, have brought renewed attention to Britain’s historic role in slavery.
On Thursday, insurance market Lloyd’s of London became one of the first British firms to issue a formal apology for its involvement with slavery, offering to make reparations in the form of financial support to organizations working to promote more economic opportunities for black people and other communities of color.
Insurance was vital in facilitating the transatlantic slave trade. The majority of ships plying the infamous Middle Passage between Africa and the Caribbean in the late 18th century, when British involvement in slave trading was reaching its height, carried insurance, according to historians Robin Pearson and David Richardson of the University of Hull, who coauthored an analysis of the insurance policies some of these voyages carried.
And, in fact, the recent protests have put the spotlight back on a little-remembered, but landmark, insurance lawsuit, that awoke public anger over the brutality of the slave trade and which many credit with helping to spark Britain’s abolition movement: “the Zong case.”
When the Black Lives Matter protesters in Bristol earlier this month dumped a statue of Edward Colston, a prominent slaver, in the harbor, Sadiq Khan, the mayor of London, was among the many commentators who took to Twitter to note that it was poetic justice: Slave-ship captains often threw slaves overboard during the infamous Middle Passage from Africa to the Americas. And many of these commentators explicitly mentioned the Zong.
The Zong was a British slaving ship, owned by a syndicate of wealthy slavers and merchants from Liverpool, including William Gregson, who would later become the city’s mayor. It was insured by another syndicate that included a group of other Liverpool slave-ship owners. In mid-August 1781, the ship departed Ghana with 442 slaves on board—twice the number the ship was designed to safely carry—bound for Jamaica. Through a series of mishaps and navigational errors, the Zong took more than three months to reach Jamaica, and then wound up missing the island and running perilously low on water. Exactly what happened next is a matter of dispute, but one thing is clear: Over the three days starting on Nov. 29, the crew murdered 142 slaves by tossing them overboard.
The Zong finally reached Jamaica on Dec. 22. When word of what had happened eventually made it back to England, the Zong’s owners tried to claim compensation for the drowned slaves under their insurance. Policies excluded claims for slaves who died from “natural causes,” such as disease, malnutrition, or accidents. But policyholders could claim for slaves who died due to “perils of the sea,” such as storms, or under a “general average” rule that allowed cargo to be jettisoned in emergencies to save the ship.
The insurers suspected the Zong’s peril, if it existed at all, arose only through the incompetence of her crew and refused to pay. (Evidence would later emerge that, after the first day of killings, it had rained heavily, and the ship had sufficient water on board when it did reach Jamaica, leading some historians to suspect the crew always intended to commit insurance fraud through the massacre.) So the Zong’s owners sued.
In a trial in 1783, the jury ruled in favor of the owners. But the insurers appealed. At which point, the early abolitionist Granville Sharp caught wind of the case and began chronicling the barbaric behavior of the Zong’s crew in contemporary newspaper accounts. He also began looking into whether he could bring a private prosecution against the Zong’s crew for murder. During the appeal, among a variety of other arguments, lawyers for the insurers tried to make the case that the Zong’s crew had indeed committed murder when they tossed the slaves overboard and should not profit from it.
The appeal was heard by Lord Mansfield, who had also presided over the initial trial, and two other judges. Mansfield had, years earlier in a famous case, ruled that slavery was not supported by common law in England, providing an early chink in slavery’s legitimacy. And Sharp no doubt hoped he would rule in favor of the insurers.
But, in the Zong appeal, Mansfield ruled that the jury had been right to discount the humanity of the slaves. The jury, he said, “had no doubt (though it shocks one very much) that the Case of Slaves was the same as if Horses had been thrown over board…The Question was, whether there was not an Absolute Necessity for throwing them over board to save the rest? The Jury were of opinion there was.”
During the appeal, however, new evidence had emerged of the crew’s numerous navigational blunders and the rainstorm during the killing spree, so Mansfield ordered a new trial. (There is no record that the trial ever took place, and it is possible the shipowners dropped their claim in light of the new evidence.)
As a legal precedent it only affirmed the right of slave-ship captains to murder slaves, but politically, the case would prove to be an important victory for Sharp and the abolitionist cause. The Zong case helped galvanize public opinion against the slave trade, according to James Walvin, emeritus professor of history at the University of York and author of a 2011 book on the case. “It really starts out of that courtroom and the propaganda that flows out of it from Granville Sharp,” he says. With an increasingly literate society in England and widespread books and newspapers, for the first time the majority of Britons become aware of the barbarous practices taking place in the middle of the Atlantic, Walvin says.
The case had no immediate impact on slave voyages or the insurance industry that supported them, Pearson and Richardson say. Richardson notes that because most of the insurance syndicates were made up of other slave-ship owners, they were insulated from the pressure the abolitionist movement brought to bear.
Parliament, however, was not, and by the end of the 1780s, it was forced to respond to numerous petition drives calling for an end to slavery. These petition campaigns resulted in the passage of a series of Slave Trade Acts, starting in 1788, that improved the conditions on British slaving ships by restricting the number of slaves each ship could legally transport and ensuring certain sanitary conditions. In 1794, the Slave Trade Act was amended to limit the way insurers could underwrite slave voyages, making the “perils of the sea” and other general phrases illegal. Finally, in 1807, Parliament made it illegal for any British ship to carry slaves and for British insurers to underwrite slaving voyages.


fortune--2020-06-19--Investors brace for ‘quadruple witching’ markets turbulence. What’s quadruple witching?

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Happy Friday, everyone. And a happy Juneteenth, too.
It’s also quadruple witching day, which often brings trading volatility as futures and stocks contracts expire and big players unwind their positions. Add that calendar quirk to a pandemic, a global recession, an army of newbie retail investors, and it should be a fun day.
Stocks and futures, so far, are mostly in the green. We did hit a few record highs yesterday: Clorox, Spotify and the daily number of global COVID-19 cases.
Let’s see where investors are putting their money.
Markets update
Asia
The major indices are all in the green. Shanghai leads the way, up nearly 1% in late-afternoon trade.
leads the way, up nearly in late-afternoon trade. To comply with the “Phase 1” trade deal, China plans to buy more U.S. farm products . It’s good news if you’re an American soybean or corn farmer. The announcement is also lifting markets this morning.
plans to buy more . It’s good news if you’re an American soybean or corn farmer. The announcement is also this morning. That’s despite the latest antagonistic Trump tweet. The president last night warned the U.S. could still pursue a “complete decoupling from China”—probably not what U.S. soybean and corn farmers wanted to hear.
Europe
The European bourses ticked higher out of the gates. The bluechip Euro Stoxx 50 was up 0.8% a half-hour into the trading session, before losing ground.
out of the gates. The bluechip was up a half-hour into the trading session, before losing ground. EU nations go to the bargaining table today in hopes of hammering out an agreement on the €750 billion coronavirus rescue fund. The Germans and French want a deal done quickly while fiscal hawks like the Dutch and Austrians are pushing back.
go to the bargaining table today in hopes of hammering out an agreement on the coronavirus rescue fund. The and want a deal done quickly while fiscal hawks like the and are pushing back. The UK debt level hit a 57-year high in May. Debt-to-GDP topped the dreaded 100% level last month as tax revenues plunged amid the coronavirus lockdown.
U.S.
The Dow , S&P 500 and Nasdaq futures are all pointing solidly higher. The Nasdaq looks to extend its rally to a sixth straight day .
, and futures are all pointing solidly higher. The looks to extend its rally to a . Ray Dalio warned clients of a “lost decade” for stocks. One reason, the hedge fund titan says, is because globalization has peaked .
warned clients of a “lost decade” for stocks. One reason, the hedge fund titan says, is because . The U.S. has pulled out of global talks to harmonize taxes on digital companies , escalating a trade riff with Europe, India and a number of smaller Asian and South American countries that are mulling a digital tax on the likes of Facebook and Alphabet’s Google.
, escalating a with Europe, India and a number of smaller Asian and South American countries that are mulling a on the likes of Facebook and Alphabet’s Google. What might we expect from triple witching today? The rebalancing of positions could trigger $48 billion worth of trades. Is that a lot? Six months ago the same event forced through $30 billion.
Elsewhere
Gold is up.
is up. The dollar continues to fall.
continues to fall. Crude is jumping today with Brent up more than 2%.
By the Numbers
45.7 million. I know the markets don’t care about this number, but I still think it’s a big deal. Stubbornly, I’m going to put it in the top spot each Friday for the foreseeable future… Yesterday’s jobless claims were worse than expected. Looking back to March, 45.7 million workers in the United States have now filed for unemployment benefits. Yesterday’s tally of 1.5 million jobless claims was a mere 58,000 lower than the prior week—not much of an improvement. The fact we’re still seeing more than a million new claims per week, three months into the crisis, signals more permanent damage to the labor market. “Layoffs that happened at the beginning of this [cycle] likely were intended as temporary,” Martha Gimbel, an economist and a labor market expert at Schmidt Futures, told the New York Times. But if you’re laying off people now, that’s probably a long-term business decision.” Here’s what the trend looks like:
9,943.05. The Nasdaq is off its record high of 10,086, reached on June 10. But the tech-heavy index has been remarkably consistent, notching five straight days of gains. It closed up 0.3% yesterday to finish at at 9,943. The big winner yesterday was Spotify, which hit an all-time high after the streaming service announced a bevy of content deals. Spotify is now up 73% this quarter.
-3.57. The S&P 500 is down roughly 3.5% YTD. But dig into the numbers and you see a stark picture of winners and losers. Get a load of this chart, courtesy of Market Ear, which they pulled off the Bloomberg terminal. Just three of the 11 S&P segments are in the green YTD. It’s the Big Tech Show.
Clarification: I got a note from a reader about yesterday’s roundup in which I made reference to the U.S. unemployment benefits due to expire in July. I should have made that clearer—what is set to expire in July is the more generous supplemental benefit of $600 per week. The standard benefits, in most cases, are unaffected by the scheduled July 31 expiry date.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
If you were to assemble the people who could help you truly understand health care and how it’s affected businesses today, who would you pick? Here’s a few on Fortune’s list:
The CEOs and presidents of healthcare giants Johnson & Johnson, Moderna, Novartis, Aetna
Johnson & Johnson, Moderna, Novartis, Aetna co-discoverer of CRISPR-Cas9 Dr. Jennifer Doudna
Dr. Jennifer Doudna Dean of Stanford Medicine Dr. Lloyd Minor
Dr. Lloyd Minor chief medical officers from IBM, Verily, Google Health
from IBM, Verily, Google Health healthcare venture capitalists like Sue Siegel
like Sue Siegel Thrive Global CEO Arianna Huffington
Arianna Huffington CEO of REFORM Alliance Van Jones
Van Jones NBA Commissioner Adam Silver
Hear from them and more at FORTUNE Brainstorm Health, our virtual health-care conference on July 7-8. As a newsletter subscriber, you’re invited to use this code—BSH20HALF!—and get half off.
Today's reads
$2.1 billion. That's the amount of cash missing from the accounts of Wirecard. Shares in the high-flying German fintech bombed yesterday on the news, and there are now big questions hanging over the future of CEO Markus Braun. The company suspended its COO today, and is down a further 20%.
Light. Tunnel. End. Delta Air Lines is predicting it could return to breakeven by next Spring, an impressive feat for a company that's losing about $30 million per day. CEO Ed Bastian revealed that forecast at yesterday's virtual annual shareholders meeting. He also revealed that 500 employees had contracted COVID-19. I'll take the car for now.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
An important day in history
Happy Juneteenth, everyone! What's Juneteenth? 135 years ago on this date, the Union army general, Gordon Granger, read out federal orders proclaiming that all enslaved persons in Texas—in essence, everywhere in America—were now free, and that Civil War was over. A movement in state houses and in board rooms has been growing ever since to mark the day as an official holiday celebrating liberty for all Americans.
You probably have seen many companies have made splashy announcements about Juneteenth company holidays, but the way they treat their black employees when they return on Monday matters just as much, if not more. Fortune has compiled stories from black employees across industries that reveal what their experiences in corporate America are like. It’s clear: No matter what companies are doing to take a stand against racial inequality right now, there is much more work to be done.


fortune--2020-06-19--Beyond Juneteenth: Corporate leaders must pave a path to economic justice

My great-great-grandmother Addie Lynch was born on a plantation in the late 1800s. Her mother was born a slave. One of my most meaningful photographs is a picture of my great-great grandmother taken with my father in DeRidder, La., more than 60 years ago. I look at this photograph often, and I’m proud that my middle name, Addison, is in her honor.
The photo serves as a personal reminder that it was not that long ago that members of my family were oppressed by the shackles of slavery. This picture is also a reminder of the importance of Juneteenth, a date of true independence for so many of my ancestors, including many who were slaves in the state of Texas. Juneteenth marks the day—June 19, 1865—when Union Major General Gordon Granger arrived in Galveston, Texas, to bring news of the Confederacy’s surrender, the end of the Civil War, and the end of slavery in America. Nearly two years after the Emancipation Proclamation, my ancestors, and millions of other African-Americans, were set on a path toward independence and liberation on Juneteenth.
My hometown is Baton Rouge, and growing up I was always keenly aware of the importance of Juneteenth, evident in celebrations and barbecues that took place in our community with friends and family. Later, as I got to college and then into my career, I discovered that most outside the African-American community had not heard of Juneteenth or did not know much about it.
With all this history in mind, it was an emotional moment for me when I announced on a company all-hands video meeting for Cadre, the real estate investment technology company I cofounded and run, that I was making Juneteenth a permanent company holiday. I showed my team the photo of my great-great-grandmother and urged them to take the day to learn more about Juneteenth and reflect on where things stand in America’s long march toward true equality.
Juneteenth takes on a special meaning this year as calls for justice have intensified in the aftermath of the killing of George Floyd by a police officer who has since been charged with murder. I have spent most of my professional career staying relatively quiet about how race has impacted my life, because it is a deeply personal topic. But in the past few weeks, I’ve realized that my role provides me a platform to share my experiences, personalize the pain witnessed by so many, and be a voice for change. I recognize that now more than ever I must speak truth to power and help illuminate painful aspects of my personal, and our country’s collective, history. If more of us do so, perhaps we will be able to come together, grow from past inequities, and build a more perfect society and union.
We’re beginning to see communities come together in powerful ways, and corporate America is taking steps toward building more diverse companies and boards, while building greater transparency and accountability. Yet there is still much work to be done, and the big test we now must face is whether we can convert this outrage into enduring action. Systemic racism has plagued America for 400 years, and it would be naive to think it will be easy or simple to address. It’s also easy to say the right things when the spotlight is on, and much harder—and more important—to do the right things when the urgency of the moment has passed.
In my view, the most important step we can take is to move from one-time, symbolic donations to sustained, structural investments in underserved communities. For too long, we’ve accepted a lack of diverse talent as an excuse for a lack of diversity in the workforce and on corporate boards. The talent pipeline is definitely a problem, but instead of shrugging, we must make it our job to fix the pipeline. We need to ensure young people of color are exposed to internships that offer a host of opportunities for advancement, we need to create formal mentorship programs to provide hands-on guidance, and we need comprehensive skills-training programs that help people of all ages get a start in careers that will allow them to succeed in a fast-changing economy.
Ryan Williams, CEO of Cadre Photo: Courtesy of Michael McWeeney
Some of these things are easier than others. I can and will create stronger internship and mentorship programs within my company. We can and will develop programs to help people from underserved communities better understand how technology can help them invest in real estate, which has always been one of the biggest determinants of wealth in America. We can and will invest in education and skills training in the communities where we work and serve. But we need collective action, in the private sector and between the public and private sectors, to scale up ideas like these.
At a time when the pandemic and the terrible events in Minnesota, Louisville, Georgia, and elsewhere have laid bare the economic inequities that have always existed in our society, I choose to be hopeful that we will keep moving toward leveling the playing field and offering opportunities to all. I can’t help but think that taking a day to reflect on these values—and to renew our determination to work together for a common cause—would make my great-great-grandmother pretty proud.
Ryan Williams is CEO of Cadre, a technology platform for investing in real estate.


fortune--2020-06-19--Trump threatens ‘complete decoupling’ from China

President Donald Trump said the U.S. could pursue a “complete decoupling from China” in response to unspecified conditions, his most forceful statement yet on the souring ties with Beijing.
In a tweet Thursday, Trump refuted comments a day earlier by U.S. Trade Representative Robert Lighthizer, who said a full decoupling of the world’s two biggest economies was not “a reasonable policy option.”
The tweet comes a day after Secretary of State Mike Pompeo met with Chinese official Yang Jiechi, amid questions over whether the nations’ trade pact will remain in tact. According to Pompeo, Yang said China is committed to maintaining agriculture purchases that were crucial to Trump’s support of the deal.
It was not Ambassador Lighthizer’s fault (yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China. Thank you! — Donald J. Trump (@realDonaldTrump) June 18, 2020
Meanwhile, Trump’s former national security adviser, John Bolton, has cast new light on the deal by alleging that Trump told Chinese counterparts to help him win re-election by buying more U.S. farm products.
Trump has also ramped up his rhetoric against Beijing as the coronavirus pandemic continues to spread in the U.S. Trump refers to the illness as the “plague from China,” and has accused the country of withholding important information in the early days of the outbreak.
“I think the trade deal is a great deal. But ever since we got hit with the Chinese plague, I feel different toward everything having to do with China. And I’ve always been hardline on China,” he told the Wall Street Journal during an interview on Wednesday.
Lighthizer told a congressional hearing on Wednesday that he believes U.S. supply chains should be brought back from China, but that the countries’ economies should remain intertwined.
“This issue of decoupling is a complicated one. Do I think supply chains should be brought back? Yes. Do I do think they should be brought back from China? Yes. Do I think they should be brought back from everywhere else? Yes,” Lighthizer said.
“Do I think that you can sit down and decouple the United States economy from the Chinese economy? No, I think that was a policy option years ago,” he added. “I don’t think it’s a policy — a reasonable policy option at this point.”


fortune--2020-06-19--American Airlines removes passenger for refusing to wear mask—and bans him from future flights

American Airlines Group Inc. removed a passenger who refused to wear a face covering and banned him from taking flights in the future, capping a week in which U.S. carriers vowed to step up enforcement of mask use.
Brandon Straka won’t be allowed to fly on American until face coverings are no longer required, the company said in an email Thursday. Straka, a conservative activist with about 400,000 followers on Twitter, posted a video Wednesday saying he had been kicked off his flight for not wearing a mask. He also accused American’s employees of intimidating him.
I was just removed from my flight for not wearing a mask. 1st time this has happened. Not a federal law. @AmericanAir staff standing over me telling me it’s THE LAW. So much for “please respect those who can not wear a mask”. When I pointed out this wasn’t a law I was removed. — Brandon Straka (@BrandonStraka) June 17, 2020
Straka’s ban validates a warning U.S. airlines made this week when they vowed increased vigilance in requiring mask use amid mounting concerns about new Covid-19 infections. United Airlines Holdings Inc. pledged to ban passengers flouting the rules, which exempt small children and people with medical conditions or disabilities that prevent them from wearing face coverings.
In its statement, American said it was “committed to protecting the safety and well-being” of customers and employees.
“We expect customers who choose to fly with us to comply with these policies, and if necessary, we will deny future travel for customers who refuse to do so,” the Fort Worth, Texas-based airline said. “Restricting travel is a step we take very seriously, and it will only occur after a comprehensive review of the facts of an incident.”
Straka didn’t immediately respond to a message sent through his website. In a tweet earlier Thursday, he said he had been “inundated with death threats, attacks on social media & email” because of the incident.
According to American, Straka boarded his flight from New York’s LaGuardia airport with a face covering but later took it off. When asked whether he had a medical condition, he replied that he didn’t, American said. Later, “he gave our team a different answer,” the company said.
American said it was refunding Straka for the remaining leg of his trip and any upcoming flights on the carrier.


fortune--2020-06-19--The enduring history of health care inequality for black Americans

Looking to invest in companies that care about equality ?
This NAACP-backed ETF may be the answer

It’s tempting to think that the coronavirus pandemic sees no color. This is, after all, a pathogen. A virus. A virus infects a host, and it spreads with no regard for who or what unto it may latch.
But the numbers tell a different story—a tale that’s a depressing continuation of longstanding health care disparities for people of color in general and black Americans in particular.
The racial COVID conundrum
COVID-19 has a disproportionate impact on black Americans. That’s a basic reality that’s become clear over the past few months of the pandemic. While black people constitute just 13% of the U.S. population, nearly one in four COVID-19 deaths where the patient’s race is known is black, according to the COVID Tracking Project’s racial data initiative.
Of the 20 U.S. counties with the highest COVID-related death rates, eight of them were regions with predominantly black residents.
Credit: COVID Tracking Project COVID Tracking Project
Surveys underscore how much further the crisis extends. “You see these disparities play out particularly acutely during the COVID crisis,” says Jennifer Benz, principal research scientist and deputy director of The Associated Press-NORC Center for Public Affairs Research at the University of Chicago. “One of our key measures that illustrates the racial and ethnic disparities is asking people if they have a family member or close friend who they know has died from COVID. And the differences are incredibly stark.”
Across the U.S., about 4% of white Americans surveyed know somebody who’s died from COVID-19 versus 11% of black Americans. It can vary from region to region, and the disparity is even larger in certain areas as reflected in the COVID Tracking Project data. In Atlanta, 4% of whites versus 14% of blacks know someone who has died from COVID. The figures are similar in Baltimore and even worse in Birmingham.
The precise reason for these stark disparities is nebulous. Genetics may play a part, to an extent. But numerous other factors may come into play.
“The outcomes are so much worse when people have other pre-existing conditions. Decades of research have shown the disproportionate rate at which black Americans have heart disease, diabetes, hypertension, and other such conditions,” says Benz. “And then you begin to see how all these longstanding inequities fit together in the puzzle that is COVID.”
A perfect storm of health inequities
The “nature versus nurture” debate has raged for decades. If someone develops heart disease or another chronic condition, is it their fault because they ostensibly chose to eat unhealthy foods, smoke cigarettes, drink alcohol, or not exercise? Or is that a far more complicated issue that stems from years of systemic inequities?
Bernard Tyson, the late CEO of nonprofit health giant Kaiser Permanente, was an ardent evangelist for the theory of the “social determinants of health” which lays significant blame on the latter proposition.
“We think all the ingredients are in place to move into other lanes that are directly linked to the health and wellbeing of people that would not fit neatly under the category of ‘health care,’ but that are part of the whole ecosystem of health,” he told Fortune a year before his untimely death. “And we now know that the social determinants of health—many of the other categories that we haven’t really addressed concretely—impact a person’s health much more than medical care. One of the big ones is the thing called the zip code. Literally, you can see the differences in the life expectancy in one zip code versus another.”
“Somebody’s zip code can be so predictive of what health outcomes they face. It’s not just individual choices, but one’s environment and the policy structures within which they live their lives,” adds Benz.
A zip code can mean the difference between living in a region with abundant access to supermarkets that sell fresh produce versus food deserts where one must rely on a corner store or bodega for nutrition. A lack of socioeconomic opportunity may spell the difference between being able to prepare a home cooked meal or working the graveyard shift. A 2018 Environmental Protection Agency (EPA) analysis found that black people “had 1.54 times higher burden” in exposure to PM 2.5, an air pollutant created by burning fossil fuels that’s linked with heart disease, lung disease, and generally shorter life spans.
In the COVID era, these are all factors that play into the inequities clearly on display.
A persisting history of medical discrimination
Americans have swung sharply in support of the Black Lives Matter movement in the wake of George Floyd’s killing by a white police officer. A survey by Fortune and Deloitte of 222 CEOs found that 62% of the chief executives are planning tangible policy challenges in their workplaces as a response to the protests and unrest.
Coronavirus cases have risen as states reopen, and some officials have pointed to the impact of the socially undistanced Black Lives Matters protests. Officials have encouraged protestors to isolate, wear masks, and get tested after attending group events—but black Americans are less likely to have access to testing facilities. It’s also unclear whether or not an open air protest where people are properly masked or distanced and taking other precautions is nearly as much of a problem as being in enclosed spaces unmasked.
The public cognizance of systemic racism when it comes to police brutality, though, doesn’t appear to extend to medicine.
“A lot of Americans aren’t even aware that these disparities in health care exist,” says Benz. University of Chicago’s NORC conducted a series of studies in the early 2000s and 2010s finding that while more than 70% of respondents believed black people were treated more unfairly than white people when it came to interactions with police, just 42% said the same of access to health care.
Multiple studies paint a different reality. Black Americans consistently face fewer opportunities to get medical care and, even if they do, tend to receive substandard care or face discrimination based on antiquated stereotypes and communication barriers.
“Physicians use clusters of information in making diagnostic and other complex judgments that must be arrived at without the luxury of the time and other resources to collect all the information that might be relevant,” reads a sweeping report by the Institute of Medicine (US) Committee on Understanding and Eliminating Racial and Ethnic Disparities in Health Care. “These conditions of time pressure and resource constraints are common to many clinical encounters, and map closely onto those identified as producing negative outcomes due to lack of information, to stereotypes, and to prejudice.”
A separate study from Johns Hopkins concludes that “communication skills training programs targeting emotion-handling and rapport-building behaviors are promising strategies to reduce disparities in health care and to enhance trust among ethnic minority patients.”
In other words: A largely white physician force doesn’t necessarily know the best ways to interact with black patients, and that leads to an inherent dearth of trust—the beating heart of medical decision-making.
And then there’s access to health care itself. While the Affordable Care Act, also known as Obamacare, significantly ramped up government programs such as Medicaid, the insurance option for poor or disabled Americans, its benefits were asymmetric. States had the option to choose to expand Medicaid under the law. The few states which have not expanded Medicaid tend to be poor states in the South, which has an outsize effect on communities of color, according to the nonpartisan Kaiser Family Foundation.
Then there were the 2.3 million Americans who fell into the so-called “coverage gap” where they made just enough money not to qualify for Medicaid but not quite enough to receive Obamacare’s subsidies for individual private plans.
Credit: Kaiser Family Foundation Kaiser Family Foundation
Southern states with large black populations, particularly Texas and Florida, have some of the biggest gaps in coverage.
The financial catastrophe wrought by the coronavirus pandemic certainly hasn’t made things easier. Nearly half of Americans receive health insurance through their employer, a result of a series of historical accidents which have linked insurance to having a job.
The most recent federal jobs report found that black Americans, and black women in particular, have borne the brunt of the unemployment crisis. While the unemployment rate dipped from 14.2% to 12.4% for white people in May, it rose from 16.7% to 16.8% for black people.
There’s no doubt that health is based on a combination of choice and chance. Our biological machinery can lead to arbitrary outcomes which are the fault of no one. But for many black Americans, the “choices” were made by others on their behalf long ago.


fortune--2020-06-19--Looking to invest in companies that care about equality? This NAACP-backed ETF may be the answer

This was the most out-of-stock product on websites in May

Two years ago, the NAACP partnered with Impact Shares—a nonprofit fund manager specializing in socially conscious, ESG-focused exchange-traded funds (ETFs)—to develop a novel investment product.
While the ESG (environmental, social, and governance) investing movement was already gaining a foothold in the world of finance, both organizations noticed a notable gap—funds that target, and reward, companies with policies promoting diversity and racial equality.
“Impact Shares was looking for an organization that could help frame the ‘S’ [in ESG] for them, and we’d been doing corporate scorecards for 25 years: looking at data, scoring and ranking companies, and providing that information to our constituency,” Owens tells Fortune.
The result was the Impact Shares NAACP Minority Empowerment ETF (ticker: NACP), which tracks nearly 200 large- and mid-cap companies on the strength of metrics measuring their commitment to diversity, inclusion, and equality. That includes everything from their employee hiring, pay, and promotion practices, to the nature of their products, services, and supply chains.
“As it relates to issues impacting people of color, there is no better sector specialist than the NAACP,” according to Impact Shares CEO Ethan Powell. While the NAACP helped develop the criteria on which the ETF is based, the screening and composition of the fund itself is handled by Morningstar and its ESG research subsidiary, Sustainalytics. Meanwhile, Impact Shares donates net proceeds from the ETF back to the NAACP, to help fund the organization’s social advocacy work.
The goal for investors, Powell says, is to unlock what he terms “social alpha,” or “superior social outcomes relative to your area of concern.” With the killing of George Floyd having unleashed a wave of historic protests across the U.S. and put a spotlight on the injustices faced by people of color, the ETF and its concerns are more relevant than ever.
“Now, two years later, here we are in this moment in this country, and it’s an interesting time to raise the questions that this fund was created to raise,” Owens says.
Today, the fund has more than $4 million in net assets under management, with large-cap stock holdings across all 11 industry sectors tracked by the S&P 500. Among its biggest holdings include Amazon, Microsoft, Apple, Alphabet, Johnson & Johnson, and JPMorgan Chase. As of Thursday afternoon, the ETF was up 1% this year to date.
While some of its holdings aren’t the first companies that come to mind when one thinks of policies and practices promoting social justice, Owens notes that these corporate behemoths are often the ones with the scale and resources to pursue the initiatives with the most impact. Powell adds that they’re also the ones that “prioritize reporting” and transparency of such practices.
“What we found is that these larger companies are represented in the fund because they have diverted resources to working on these issues,” he says. The ETF has “opened the door” for the NAACP to “engage those companies in conversations we’ve not been engaged with in the past, Owens adds. Meanwhile, other companies not included in the fund “now want to be included” and have reached out to the NAACP to open a dialogue, he says.
Myriad companies reacted to Floyd’s death, and the subsequent protests, by releasing solidarity statements and announcing initiatives championing diversity and equality. As such, it would appear that the ranks of those that would qualify for the ETF could well grow in the coming years.
In fact, Powell believes that this moment in American history will prompt “changes that hopefully render some of the [ETF’s] screens obsolete because they are ubiquitous.” At that point, the fund will “continue to raise the bar”—revising its screens and setting higher standards for those included.
“Our hope is that some of the basic policies and practices that you would think would already exist in corporate America are no longer a point of differentiation,” he says.


fortune--2020-06-19--Investment management is overwhelmingly dominated by white men—and it’s costing you money

We’ve become used to being disappointed by corporate diversity, such as the fact that only 1% of Fortune 500 CEOs are black. Even further down the org chart, the numbers get only slightly less bleak: About 9% of law firm partners belong to racial or ethnic minorities. About 33% of Apple staffers are women. Etcetera.
But in one industry, diversity numbers seem like they’re straight out of the 19th century: Firms owned by white men manage a stunning 98.7% of the $69 trillion managed by the U.S. asset management industry. That’s according to a 2019 Knight Foundation analysis, and includes hedge funds, mutual funds, real estate funds, and private equity funds.
The data for staff at investment firms isn’t much better. A 2017 survey found that 88% of senior fund managers are white, and even junior positions such as analysts and associate managers are more than 70% white. Women, meanwhile, make up only 8% of professional investors.
This imbalance isn’t just costing women and people of color professional opportunities. There’s also strong evidence that it’s costing investors money.
The same Knight Foundation study that quantified the egregious underrepresentation of women and minority-owned firms in asset management overall, also found that those firms were overrepresented among the highest-performing managers.
Programs that give opportunities to underrepresented asset managers have also found that those managers outperform. The Emerging Managers program at the Teacher Retirement System of Texas (TRS) places more than half its assets with minority- and women-owned managers, and over the past three years has outperformed the system’s own performance benchmarks by as much as 2%—which, as any investor will tell you, is a huge amount of “alpha.”
Kirk Sims is leads the Emerging Manager Program for Teachers Retirement System of Texas Courtesy of TRS of Texas
“We see that there are advantages not just in the diversity of people, but in diversity of thought,” says Kirk Sims, head of the TRS Emerging Manager program. “They’re looking to do things in a different way than the firms that they were at. Or they’re subject-matter experts who can do a deeper dive in a certain area.”
Broader research confirms Sims’s assessment. Studies from McKinsey and other sources have consistently found that inclusive teams make better business decisions and statistically outperform less diverse firms. Broadly, that’s because a variety of world views helps teams converge on more accurate conclusions.
So why hasn’t the asset management industry acted on that reality to increase diversity—and investment returns?
There are at least two reasons for the staggering imbalance: measurable bias against even established and successful managers of color, and a broken talent pipeline and benchmarks that create added barriers for asset managers who aren’t white males.
“It’s the norm—white men manage money, therefore they’re the ones who can manage money,” says Erika Davies, a researcher studying capital markets at Georgetown University’s Beeck Center. The impact of that racist bias was reflected in a 2019 study, which found that asset allocators managing capital for pension funds and foundations showed bias against diverse investors whose actual performance was highest.
Erika Davies is a Fellow, Equitable Access to Capital Markets in the Fair Finance portfolio with the Beeck Center for Social Impact + Innovation at Georgetown University. Courtesy of Erika Davies
“The other factor is whether or not those firms are even getting a chance to compete,” Davies continues. Outcomes of historical discrimination also make it harder for diverse-owned firms to meet certain seemingly neutral benchmarks used by allocators at large funds. Davies says the racial wealth gap, for instance, makes it harder for diverse managers to attract enough investment from friends and family to meet minimum thresholds for assets under management, or AUM, required to win allocations from large institutional funds.
Funds also often require asset managers to have long track records, creating another barrier. “If a firm track record has to be 20 years, you’re going to screen out a large percentage of [diverse] firms,” says Davies. “The oldest black-owned asset management firms in the country are only 30 years old.”
There has been some response to the issue, particularly by public funds and philanthropic foundations. In addition to Texas, the Maryland, New York, and Illinois teacher retirement systems all have emerging-manager programs. Those programs do not specifically prefer women or minority managers, but their openness to smaller or newer managers tends to benefit those groups.
The Kresge Foundation and the Silicon Valley Community Foundation are among the charitable endowments that have made commitments to fund manager diversity.
Sims also points out the importance of larger firms—the J.P. Morgans and Goldmans of the world—hiring diverse managers. “They provide the necessary training ground and the ability to build up the expertise that will then allow people of color or women to spin out and start their own [management] firm.”
Despite the entrenched barriers and huge imbalance to be overcome, Sims strikes a positive note on the direction things are going. In particular, he says, improvements in big-firm hiring have begun to produce more women-owned management firms.
Perhaps more importantly, he sees attitudes changing. The Teacher Retirement System of Texas hosts an annual conference for emerging managers, and Sims says interest from allocators looking to connect with diverse managers is growing fast.
“I think that the recognition that there could be alpha by investing in managers that are looking at the opportunity set a little bit differently is starting to resonate.”


fortune--2020-06-19--This was the most out-of-stock product on websites in May

As states issued stay-at-home orders in March, scared and panicked Americans rushed to stock-up on households essentials which quickly emptied out and created national shortages. Snagging toilet paper was like finding a needle in a haystack.
Now even as states ease those stay-at-home orders, many households essentials continue to be out-of-stock online, according to a recent report by Euromonitor International, which analyzed e-commerce data from more than 1,000 online retailers.
Among the items measured by Euromonitor International, liquid soap is in shortest supply in the U.S. as of May, showing up as out-of-stock on 21.9% of e-commerce sites. That was followed by baby wipes (13.7%), hand care* (9.8%), and soap (8.5%).
And as the economy starts to recover, some of the shortages have actually worsened. Soap, hand care, and liquid soap all saw increased shortages online between April 26 to May 17. Essential items online have also increased in term of prices, but crackdowns from companies like Amazon have prevented huge spikes.
“Compared to other countries, U.S. e-commerce price fluctuations have experienced smaller swings, due in part to stricter enforcement,” the Euromonitor International researchers wrote. “As the COVID-19 outbreak continues to worsen, U.S. consumers’ online retailer dependency to provide necessities and daily luxuries will only grow.”