Bank Shareholders Begin to Fight Back Against Their Politicization
AP Photo/Lisa Poole, File
Bank Shareholders Begin to Fight Back Against Their Politicization
AP Photo/Lisa Poole, File
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Shareholders have placed a proposal on the ballot for the annual shareholder meeting of Bank of America which deals with what appears to be a pattern of reverse discrimination in Bank of America's diversity training program. The proposal was made by The National Center for Public Policy Research and reads as follows:

"Resolved: Shareholders of the Bank of America Corporation (“the Company”) request that the Board of Directors commission a racial equity audit analyzing the Company’s impacts on civil rights and non-discrimination, and the impacts of those issues on the Company’s business. The audit may, in the Board’s discretion, be conducted by an independent and unbiased third party with input from civil rights organizations, employees, communities in which the Company operates and other stakeholders, of all viewpoints and perspectives. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on the Company’s website."

Media reports about anti-discrimination employee training material which is potentially racially biased raise the issue to the degree that it warrants further inquiry. For example, the New York Post reports that Bank of America offered and partly funded diversity training which included high controversial ideas associated with Critical Race Theory (CRT) including:

The idea that the United States is a system of white supremacy; that employees must decolonize their minds; that white toddlers develop racial bias; and reverse discrimination and reverse racism are not possible because racism can only refer to an attitude which affirms the supremacy of the dominant group. The view that racism and discrimination can only run in one direction is idiosyncratic to a narrow band of ideological theorizing. Most people believe that animosity including the attribution of inferiority of perspective against any racial group, including members of the majority, is still racism and whether it is called by that label or not, is morally questionable.

From a board fiduciary point of view, such divisive and accusatory training is deeply troubling. If employee morale and acceptance is part of a productive workforce and if good HR policy means that employees should be able to "bring their whole selves to work", then diversity training should not place any group above another. 

Simply put, reverse discrimination (even if one particular theoretical system refuses to call it that) is not consistent with a meritocratic human resources policy, and invites reputational, political, legal and regulatory backlash. Bank of America opposes the resolution, simply claiming that it does not discriminate and that it pursues diversity. But such assertions are not accepted by ESG advocates and proxy services when they are applied to what is regularly called discrimination. When companies claim not to discriminate, the "socially responsible investment" community demands that they prove the assertion through a wide range of disclosures and even increasingly popular "racial equity audits". However when the topic turns to reverse discrimination, that community becomes suddenly credulous, agreeing with the company that no further inquiry is needed.  If a company simply assuring shareholders that it does not discriminate is inadequate, so then is simply assuring shareholders that it does not reverse-discriminate.

Bank of America is not the only bank which has such a resolution on the ballot today. Citigroup does as well, and similar proposals will be on the proxies of Levi's, Johnson & Johnson, CVS, and AT&T.

Observers who confuse siding with capitalism with siding with whatever management wants to do might tend to leap to the defense of these companies and oppose such resolutions. But capitalism is based on the idea of private property, and these companies are the property of the shareholders. We agree that managers should generally be left to freely pursue the business operations of the company, but that's just the point - such divisive racial training indicates that managers might be straying away from business into politics. If the leadership team does not want shareholders getting involved in employment policies such as this, the solutions is simple - stay in your lane; explain and enforce evenhanded anti-discrimination measures and restrain yourselves from promulgating currently fashionable CRT aligned or adjacent content, so that the owners don't feel the need to come along and restrain you through the proxy process.

Jerry Bowyer is the President of Bowyer Research, an economic and financial research and consulting firm.

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