Anthem, Inc. – Racial Justice Audit (2022)
Outcome: 41% voted in favor of the proposal
Whereas: To combat systemic racism, corporations should recognize and remedy industry- and company-specific barriers to everyone’s full inclusion in societal and economic participation. Racial wealth gaps cost the U.S. economy an estimated $16 trillion over the past twenty years, (1) while closing gaps could add 4-6% to U.S. GDP by 2028. (2)
Business as usual in the healthcare sector results in disparate outcomes according to race. Black and Native Americans have higher death rates than white people across a variety of illnesses. (3) One study found “a potential economic gain of $135 billion per year if racial disparities in health are eliminated, including $93 billion in excess medical care costs and $42 billion in untapped productivity.” (4)
Although data is an invaluable tool, it must be used carefully in regards to race. A widely used health insurance company’s algorithm was found to refer equally sick Black people to care less frequently than white people. (5) Opaque data collection practices by health insurance companies raise the possibility of discrimination and pose reputational risk. (6)
One year after many companies made commitments to racial justice, the practical outcomes remain unclear. A 2021 analysis characterized fifty corporate pledges totaling $49.5 billion as falling short of addressing systemic racism. (7) Shareholders lack independent assessments that racial equity strategies are impactful, address appropriate topics, and unlock growth.
Although Anthem has committed $50 million to “combat racial injustice, strengthen communities, and address health inequities” (8) among a variety of other initiatives, it has not conducted an outside assessment of its current and potential racial impacts.
Addressing systemic racism and its damaging economic costs demands more than a reliance on internal action and assessment. Audits engage companies in a process that internal actions alone may not replicate, unlocking hidden value and uncovering blind spots that companies may have to their own policies and practices. Company leaders are not diversity, equity, and inclusion experts and lack objectivity. A racial justice audit examines the differentiated external impact a company has on communities of color.
Given the many companies across sectors embroiled in race-related controversies, any company without a comprehensive third-party audit and plan for improvement of its internal and external racial impacts could be at risk. (9) Companies such as Facebook, Starbucks, and Blackrock have committed to such audits, and guidelines have been developed by practitioners. (10)
Resolved: Shareholders urge the board of directors to oversee a third-party audit (within a reasonable time and at a reasonable cost) which assesses and produces recommendations for improving the racial impacts of its policies, practices, products and services, above and beyond legal and regulatory matters. Input from stakeholders, including civil rights organizations, employees, and customers, should be considered in determining the specific matters to be assessed. A report on the audit, prepared at reasonable cost and omitting confidential/proprietary information, should be published on the company’s website.