Broken Trust

Another stumble by a big corporation followed by a weak apology and statement that it will do better. The mistakes will happen. What remains distressing, however, is the typical corporation's response, and all eyes should go to the Board of Directors for the tone it establishes by such response.

Today, I'm referencing Disney and ESPN, and their handling of multiple blatantly racist comments originating from their media. ESPN's apology "especially to Mr. Lin" just emphasizes the lack of understanding and sensitivity of the company regarding racism (it's far more than one person you hurt). But this is, as our President might say, a "teachable moment" for boards of all corporations, whether for-profit or nonprofit.

If your corporation hurts the communities it serves by its actions and you expect those communities to continue supporting you, you better take more than internal actions. You better help repair the damage you've done to the affected communities. In the best interests of the corporation, you better show you care about those communities and aim to make them a little better because of your existence. The social enterprise and occupy movements show that people do care even if consumer decision-making has lagged in evidencing that care.

Nonprofits are particularly dependent on the public, who may quickly pull their support if they don't believe in the leadership of the organization. Boards need to be on top of things and react very quickly. The full response may take some time to develop, but an intelligent immediate response is expected if the harm is very severe (e.g., child molestation – The Second Mile) or very public. The very recent Komen crisis was a lesson in how things can go wrong very quickly in significant part due to failures of the Board. Big organizations can typically survive the fall-out, but smaller organizations or those operating in the zone of insolvency may be irreparably harmed. And the reputation and health of individual directors may be severely strained by the inevitable backlash, impacting the ability of the nonprofit to attract future leaders and supporters.

So, Disney and ESPN, what are you planning to do to address a community of 14.5 million Asian Pacific Americans you hurt? I recommend as a start a very significant contribution to one or more organizations that promote an understanding of this community (there are substantial funding disparities impacting Asian Pacific Americans) and making sure your leadership and staff receive appropriate training. It's time to step up.