Essay by Cheryl L. Wade
This Essay is one of a series of articles I have written that examines persistent racial discrimination in large, publicly held corporations. In spite of legislation prohibiting discrimination, employees of color have alleged that they have been the victims of discriminatory employment practices and racial harassment in the workplaces governed by large companies. Antidiscrimination law has not remedied the racially toxic corporate cultures of many of these companies. Because Title VII of the 1964 Civil Rights Act has no “generalized code of workplace civility,” it does little to ameliorate workplace racial harassment. For this reason, a new approach is required to corporate governance as it relates to race discrimination.
In the 1990s, African-American employees filed class action litigation against several large companies. Most notably, Texaco and Coca-Cola paid $176.1 and $192.5 million, respectively, to settle racial discrimination litigation. Also part of the settlement was an agreement by both companies to change the way they treated employees of color. In this Essay, I note that the changes agreed to by Texaco and Coca-Cola were merely steps that should have been taken long before the racial discrimination litigation was filed. Both companies agreed to establish systems that would adequately monitor and respond to discrimination allegations. In other words, the companies agreed to take the kind of action that should have been taken all along to satisfy the fiduciary duty of care that directors and managers owe to ensure that shareholder profits are not reduced as a result of noncompliance with applicable law.
The problem of persistent workplace discrimination is a corporate governance issue. I explore the role of empathy in corporate governance, concluding that lack of empathy for employees of color, and too much empathy for privileged groups, precludes directorial and managerial satisfaction of the fiduciary duty of care. Directors and managers fail to monitor and investigate racial discrimination in the workplace adequately as a result of this empathy imbalance. This results in litigation and large settlements, or excessive arbitration, and the attendant negative publicity, all of which are antithetical to shareholder wealth maximization. The empathy imbalance is a matter of internal corporate social irresponsibility that precludes the potentially positive effect that workplace racial integration could have on American society.
Empathy, as used in this Essay, is defined as the “[i]dentification with and understanding of another's situation, feelings, and motives.” “Empathy has been variously described as a ...process,...a mode of observation, and an information-gathering activity.” I was drawn to definitions of empathy that described it as a “process” and an “information-gathering activity” because satisfaction of the duty of care is itself a process of information-gathering . One question I consider in this Essay is whether empathy for employees of color would inspire directors and managers to satisfy fiduciary duties of care by monitoring and investigating compliance with antidiscrimination law. After considering several writings concerning the role of empathy in the law, however, I conclude that the shortcomings of and limitations to true empathic understanding for members of racial groups that are different from the racial group of the one who empathizes make directorial and managerial empathy for employees of color almost impossible. Empathy for employees of color may also be precluded, I conclude, by the social reality of racial isolation and de facto segregation. In this Essay, I do not conclude that enhancing empathy for people of color will ameliorate persistent race discrimination in the workplace. Inspiring real empathy for people of color may be impossible. The gist of my thesis is that ubiquitous empathic understanding on the part of corporate boards and managers for other white males may begin to explain why racism persists in large companies. White men are hired more easily, promoted more frequently, and paid more than people of color and women because they are most similar to the white men who make these corporate decisions. Senior executives and directors may fail to investigate and monitor compliance with antidiscrimination law because they empathize with the white men who are hired, promoted, and paid more. At the same time, they may not be able to empathize with their employees of color.
In this Essay, I hypothesize that corporate directors and managers are more likely to empathize with white women who are victims of discrimination than with minority discrimination victims. Close personal relationships with white women who share personal narratives of discrimination inspire corporate managers to develop policies against sexual harassment and discrimination. Corporate policies prohibiting racial discrimination are not as clearly stated, and conduct that breaches these policies is infrequently monitored. Because close personal relationships between corporate managers, most of whom are white and male, and people of color are more rare than their relationships with white women, directorates and management respond more effectively to sexual discrimination and harassment than to racial discrimination. I compare empathic understanding of women and racial minorities, not to compare or compete about who has suffered the most, but simply to make an observation about the way companies are governed and the role that empathy plays in their governance.
The power and importance of empathic understanding is demonstrated by the observation that empathy may be the basis of some fundamental corporate governance principles. Certain corporate governance rules may have emerged because of the role empathy plays in the processes of corporate decision making. I offer several examples in this Essay.
My goal in this essay is not to make a futile attempt to inspire more empathy for employees of color, and less empathy for white males. My objective is to encourage corporate managers and directors and the attorneys who advise them to consider the role that empathy plays in corporate governance processes. These empathic feelings are subtle. It is even more likely that this kind of empathic sentiment is unconscious, and therefore almost undetectable and indestructible. The modest goal of this Essay is to offer the insight that too much empathy for white males, and too little empathy for employees of color, may prevent corporate officers and directors from adequately investigating and monitoring allegations of racial discrimination. It is my hope that this insight will encourage a more effective satisfaction of the directorial and managerial duty of care as it relates to ensuring compliance with antidiscrimination law.
About the Author
Cheryl L. Wade. Dean Harold F. McNiece Professor of Law, St. John's University School of Law.
Citation
76 Tul. L. Rev. 1461 (2002)