JPMorgan Chase is the latest major company to agree to conduct a third-party audit of its policies, practices and procedures with a racial equity lens, closely following a similar decision by chemical conglomerate Dow in March.
The increasingly sought-after audits analyze the effectiveness of diversity, equity and inclusion (DE&I) programs, the impacts of technology and products on racial minorities in communities and companies and the treatment of customers, among other civil rights and racial equity issues. JPMorgan agreed to complete its audit by the end of the year.
This comes as investors, including New York State Comptroller Thomas DiNapoli and the SOC Investment Group, are filing numerous shareholder proposals and sending letters to companies to conduct the audits, which they say will hold management’s feet to the fire on statements made on racial justice. Proposals on the audits have already passed at Apple and Maximus this year, while last year none of the proposals passed. In 2021, the average support for the eight that went to a vote was 31.1%, according to Alliance Advisors, an unusually high percentage for a first-of-its-kind proposal, sources say. Majority Action, just last week, released its proxy voting guide on racial justice issues, highlighting 16 proposals it recommends that shareholders vote for. Meanwhile, some companies — such as McDonald’s — have recently lost SEC challenges to exclude these proposals from proxy ballots.Agenda – ‘More Urgency’ as Racial Equity Audits Gain Steam