Resolved clauseShareholders request the Board of Directors oversee an independent third-party audit analyzing whether written policies or unwritten norms at PayPal reinforce racism in company culture, and report to shareholders on planned remedies the Board intends to take in response.
Whereas clauseWhile PayPal’s 2020 Global Impact Report indicates continually evolving efforts towards equitable culture, Black and Latinx employees are underrepresented. These groups together comprise 14% of PayPal’s U.S. workforce despite making up almost 32% of the U.S. population. People of color appear particularly underrepresented in senior leadership given that only 7% of Leadership – Director+ roles are filled by Black and Latinx leaders. According to the proponent’s analysis of PayPal’s 2020 EEO-1 Report, white men are overrepresented in top-level management – comprising about one third of second level managers but nearly half of top-level; These data indicate the need to assess structural racism in corporate culture as a cause of persistent underrepresentation of people of color in the workforce and management; Structural racism is the overarching system of racial bias across institutions and society. These systems give privileges to white people resulting in disadvantages to people of color.1 The 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 place in the economy at large2 ; Ibram X. Kendi, author of How to Be an Antiracist, explains that every policy in every institution in every community in every nation is producing or sustaining either racial inequity or equity between racial groups and that policies exist in both written and unwritten laws, rules, procedures, processes, regulations, and guidelines that govern people3 ; Academic research indicates that corporate culture can include values, norms, conventions, shared beliefs, customs, traditions, symbols, rituals, knowledge, ideology, identities, and shared mental models.4 The Proponent believes that long-term value creation could be advanced through analysis of whether and how systemic racism is embedded in written and unwritten company policies, procedures, and norms.
Supporting statementThe report should be prepared within one year, at reasonable cost and excluding proprietary and privileged information or admissions relevant to pending litigation, and, in the discretion of the board, is encouraged to include assessment of whether PayPal policies or unwritten norms: • Yield inequitable outcomes for employees based on race or ethnicity, aggregated by company role or business unit, in patterns of hiring and retention, promotion, upward mobility, disciplinary action, allocation of stretch assignments (projects intended to develop employee skills and abilities), formal or informal sponsorship and mentorship, and employee usage of benefits; • Consider cultural fit rather than capabilities or create prove it again biases (wherein employees of color are forced to prove their capabilities repeatedly); • 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.