Resolution askConduct due diligence, audit or risk/impact assessment
ESG sub-theme- Diversity, equity & inclusion (DEI)
Type of voteShareholder proposal
Company sectorIndustrials
Company HQ countryUnited States
Resolved clauseShareholders request the Board of Directors oversee an independent third-party audit analyzing whether
written policies or unwritten norms at FedEx reinforce racism in company culture, and report to shareholders on any planned
remedies.
Whereas clauseFedEx’s 2021 ESG Report states that “diversity starts at the top,” but people of color are underrepresented in management
and overrepresented in roles with lower pay and mobility. According to our analysis of FedEx’s 2020 EEO-1 Report, Black and
Latinx employees comprise 61% of “laborers & helpers,” but only 15% of executives/senior manager roles. While FedEx’s ESG
Report says its U.S. workforce is 55% diverse, only one leadership team has a Black employee (as of April 2022) despite being
headquartered in a “black-majority city”1;
Furthermore, upsetting accusations have come to light, including a 2020 allegation that FedEx wrongfully terminated two
Black drivers who faced a customer’s racist tirade and a 2022 allegation that a Black driver was told to complete his route
after being chased and shot at while making deliveries;
This evidence signals the need to assess structural racism in corporate culture. FedEx describes newly piloted or initiated
diversity programs, but has not addressed structural racism’s influence;
“Structural racism is the overarching system of racial bias across institutions and society.”2 Harvard Business Review explains
that “[c]ompanies must confront racism at a systemic level – addressing everything from the structural and social mechanics
of their own organizations to the role they play in the economy at large”3;
Author Ibram X. Kendi explains: “every policy in every institution in every community in every nation is producing or sustaining
either racial inequity or equity…” existing both in “written and unwritten laws, rules, procedures, processes, regulations, and
guidelines that govern people”4;
Corporate culture can include “values, norms, conventions, shared beliefs, customs, traditions, symbols, rituals, knowledge,
ideology, identities, and shared mental models.” 5 We believe that long-term value creation could be advanced through
analysis of whether and how systemic racism is embedded in company written and unwritten policies and norms.
Supporting statementThe report should be prepared within eighteen months, at reasonable cost and excluding
proprietary and privileged information or admissions or strategy relevant to pending litigation, and, in the discretion of the
board, is encouraged to include assessment of whether FedEx policies or unwritten norms:
1. Yield inequitable outcomes for employees based on race or ethnicity such as patterns of hiring, retention, promotion,
upward mobility, disciplinary action, allocation of “stretch assignments” (projects intended to develop employee skills
and abilities), formal or informal sponsorship, or usage of benefits;
2. Consider “cultural fit” rather than capabilities or create “prove it again” biases (wherein employees of color are forced
to prove their capabilities repeatedly);
3. Establish a cultural hierarchy through permitting racial microaggressions (behaviors that stereotype or belittle a
minority group), create perceived pressure to code-switch (behavioral adjustments used to navigate interracial
interactions), or otherwise suppress cultural identity.”
1 https://www.brookings.edu/research/the-rise-of-black-majority-cities/
2 https://nmaahc.si.edu/learn/talking-about-race/topics/being-antiracist
3 https://hbr.org/2020/06/confronting-racism-at-work-a-reading-list
4 https://www.penguin.co.uk/articles/2020/june/ibram-x-kendi-definition-of-antiracist.html
5 https://ssrn.com/abstract=3946604