‘Do you want to know your history, and do you want to deal with it? Or do you want to have someone else shame you and take you down?’
While slavery was abolished in the United States more than 150 years ago, organizations that profited from it continue to exist today — and it's in their best interests, according to Sarah Federman, an expert on the role of corporations in mass crimes.
According to Federman, a professor of conflict resolution at the University of San Diego's Kroc School of Peace Studies and author of "Last Train to Auschwitz: The French National Railways and the Journey to Accountability," one financial-services behemoth based in the United Kingdom has set a good example for how to make amends.
The market for insurance and reinsurance She said Lloyd's of London conducted research into its historical links to slavery, made the results public, and issued an unreserved apology two years ago. Lloyd's also stated its resolve to grow its Black and other people of the color talent pool, boost its hiring of people of color, and avoid participation in modern slavery through its suppliers or other ways.
Earlier this year, Federman testified before the House Financial Services Committee on Lloyd's and other businesses' atonement efforts. In a June 7 letter, Democratic members from that committee demanded information from major U.S. banks and insurers XLF, -0.86 percent on their role in the financing of slavery, as well as any racial-equity audits.
Financial institutions in the United States profited from the slave trade by selling life insurance policies on enslaved people's lives with their owners as beneficiaries, as well as making loans to owners using enslaved persons as collateral.
According to a spokeswoman for Lloyd's, the company is "on a path of inquiry and meditation as we recognize our historical linkages to slavery."
"Our historical role in the slave trade comes with a duty to help restore the damage slavery has inflicted across society," the spokesperson added. "As a result, we're utilizing all of the instruments at our disposal to address these consequences and assist generate more equal outcomes for the communities most affected, from our recruiting objectives and internal processes to our philanthropic contributions and community partnerships."
Federman talked with MarketWatch just before Juneteenth, the commemoration of the last enslaved Black people in Texas learning of their liberation on June 19th. For clarity and duration, the interview has been modified.
Federman: What they've done well — and it may seem little to people looking at the larger picture, but so few have — is create a chronology of their history labeled "The transatlantic slave trade" on their website. They aren't hedging their bets. "Oh, there was just one small difficult chapter," they don't mention. "Please accept our apologies." They go into detail about what they did.
They credit anti-racist activity and supporters in the aftermath of George Floyd's murder, however, I believe part of it came from within the company. "We've talked about it in the past, but we haven't truly dealt with it," they said, acknowledging those who brought the matter to their notice.
Then there's a section headed "A complete apology." And this is a contentious subject because any firm wants to avoid complete apologies as much as possible because it implies that there may be some legal culpability — or someone who will have to pay — down the road. Lloyd's may now be certain that the English courts will not hold them accountable. Most corporations in the United States will be shielded, for the time being, however, this may change.
However, complete apologies are uncommon. The Baltimore Sun followed suit. They issued a thorough apology a few months ago, once again stating their part and then discussing their promises.
On the commitment front, there's more they can do. [Editor's note: A third of all new recruits will come from "ethnic minority backgrounds," according to Lloyd's plans.] But I do want to applaud their dedication to openness - they've apologized and made their archives freely accessible. Of course, not every company has archived to make public in this manner. They have, though, and they did.
Federman: I'm seeking right now, and I haven't found anything in the banking field. A lawsuit drove Aetna CVS, -0.28 percent into it a little. [Editor's note: Aetna earlier stated that it "may have insured the lives of slaves" and that it "deeply regrets any involvement in this heinous conduct."]
My field of study is who is doing it well, and the discourse is always changing. People are beginning to take initiative, and I'm trying to keep up.
Universities, seminaries, and museums have all begun to conduct this job, and they've had to do more of it as a result of their devotion to truth and knowledge. As a result, we're seeing more of it. They're making progress, and it'll put pressure on businesses to take action.
‘The great leaders deal with the problems that were created for them by other people. And these are just a different kind of problem than businesses are used to thinking about.’
Federman: I can understand how people feel. That's how I felt. What changed for me was witnessing the legacies, studying them, and getting a deeper knowledge of them.
I also consider how, as president, you inherit your country's history, with all of its triumphs and tragedies. Presidents and other leaders are being expected to make amends – to apologize for their actions in the past. In the business world, no manager enters a company and declares, "I don't have to deal with the difficulties that my predecessors caused." Because you'll be taking over an uninspired office or a failing product line.
Something is about to happen. Great leaders deal with issues that have been created for them by others. And this is a different type of challenge than what most organizations are used to dealing with. However, there are more of them. More businesses are becoming aware of their moral responsibilities in the world. That is why they are leaving Russia. They consider themselves to be moral agents.
Federman: In terms of the history, I'm not sure whether it is the proportion, but it may be. Isn't it true that they don't always have a choice? Because people will choose — their employees and the general public will recognize them, and they will then be thrown into the mix.
So, part of what I'm saying is that it will happen. Our society's moral climate has shifted. What part of it do you want to be in? Do you wish to know about your past and how to deal with it? Do you want to be shamed and humiliated by someone else? It's far better to apologize before others tell you that you need to apologize.
So I tell companies that don't feel it should be done, "It's just a matter of how you want to manage this specific situation."
Marc Benioff, the co-CEO and creator of Salesforce CRM, -0.95 percent, recently delivered a fascinating lecture. He was stating that when he was in school in the 1980s, it was all about shareholder capitalism, but that today it's all about stakeholder capitalism, and that many of the CEOs he knows are beginning to see their firms as doing good in the world and playing a moral role.
So, while only 10% of people understand history, I'd estimate that 50% or more are concerned about how they are seen as moral actors in the world.
Federman: Of course, there is a reluctance among organizations to share their histories and archives. "Why should we let someone in to do that?" they reason.
"Wait a minute, we're trying to survive, right?" says the other opposition, which I can understand having worked in business. Our rivals are attempting to steal our clients left and right. It's a harsh world out there. We've got a lot of problems, and now you want me to look into the archives to see what happened to folks who are no longer alive? And then you expect me to make amends in some way? How will we know when we've completed our task? How can we tell whether the dead are content? This is a difficult ground for me to navigate."
So, do you believe that's a part of the resistance? Entrepreneurs and businesspeople anticipate the future. They're making things and dealing with rivals. They've set their sights on the future. Looking back is really unsettling and challenging. So here's how I'm putting it: Comprehending the legacies is an element of understanding diversity, equity, and inclusion efforts. Why are diversity, equality, and inclusion so important? Since of this history, and because knowing your institution's function is a component of that DEI job, I'd lump it in there.
It's critical that those of us who are encouraging them do not treat them as culprits. These aren't people who own slaves. And I believe that this is sometimes necessary from an activist standpoint. You're searching for someone to blame, but the [current] Lloyd's executives aren't the ones who did it. They just wanted to work in insurance, or whatever it was that drew them to that organization in the first place.
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