Tyson to Conduct Racial Audit After Outcry Over Workers
(Bloomberg) -- Tyson Foods Inc., one of the meatpackers that came under fire during the height of the pandemic for its treatment of a largely minority workforce, will commission a detailed study to determine whether its practices contribute to racial inequities.
An independent group will carry out the equity audit of the biggest U.S. meat company by sales, with Tyson aiming to publish its findings within a year, spokesperson Gary Mickelson said by telephone.
The American Baptist Home Mission Societies -- an investor that filed a resolution calling on Tyson to perform such an audit -- withdrew its proposal. The company had already intended to conduct a human-rights assessment, which would have included examining racial equality, before the investor proposal was filed, Mickelson said in an emailed statement to Bloomberg. It hadn’t publicized its initial plan.
The meatpacking industry is highly reliant on immigrants to staff slaughterhouses. That means it is quite diverse at the lowest-paying levels, while its C-suites and boardrooms remain overwhelmingly White. The coronavirus outbreak killed hundreds of meat-plant workers, with minorities the hardest hit, according to the U.S. Centers for Disease Control and Prevention.
Tyson is at least the third major U.S. company to say this year that it will conduct an audit after racial-justice protests across the U.S. in 2020. During the most recent proxy season, investors for the first time used shareholder resolutions to call for such racial audits, leading Wall Street firms BlackRock Inc. and Citigroup Inc. to agree.
The audits are performed by third-party organizations, which analyze business models -- from policies to products and services -- to determine whether they cause or perpetuate discrimination. Airbnb Inc. and Starbucks Corp. conducted such studies several years ago, before the police killing of George Floyd in Minneapolis put heightened focus on racial inequality.
After its audit, Airbnb asked its users to accept a nondiscrimination agreement to help prevent unfairness to people of color on its platform. The company removed more than a million users after they declined to agree with the policy, evidence that these audits can lead to consequential change.
ABHMS co-filed the proposal for a racial audit in August with 16 other investors, including Sisters of St. Francis of Philadelphia. Based in King of Prussia, Pennsylvania, ABHMS has been a Tyson investor since 2005, and its Common Investment Fund managed $255 million at the end of last year. ABHMS said it owns 345 shares in Tyson.
In its resolution, the investor had asked Tyson to recommend steps to eliminate business activities that further systemic racism and requested that the study include input from affected workers. ABHMS said the meatpacker had a history of worsening racial inequities, citing a complaint filed with the Department of Agriculture that said Tyson’s failure to prevent Covid-19 outbreaks among its largely Black and Latinx workers amounted to racial discrimination.
The resolution also referred to accusations from former employees at one of Tyson’s chicken plants that they were repeatedly subjected to racial slurs for four years.
“These allegations represent very real reputational and legal risks for the company and we applaud its decision to conduct an audit that would help Tyson mitigate them and avoid adverse impacts on communities of color,” David Moore, director of investments at ABHMS, said in a statement from the Interfaith Center on Corporate Responsibility, an investor group.
Tyson, based in Springdale, Arkansas, this year hired its first chief diversity, equity and inclusion officer. The company said it takes pride in its workforce, stating 27% of employees are Hispanic or Latino, 25% Black and 11% Asian-American, speaking more than 50 different languages. Mickelson said in the statement that Tyson has a “strong focus and commitment to racial equity and human rights.”
Shareholders have also filed resolutions for next year’s proxy season calling on McDonald’s Corp. and Johnson & Johnson to conduct racial audits.
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