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McDonald’s shareholders demand a civil rights audit

SOC Investment Group, which works with union pension fund, wants a third party to look at policies and procedures following controversial text messages from CEO Chris Kempczinski.
McDonald's Kempczinski texts civil rights audit
Photo by Jonathan Maze

An investment fund that works with a union pension fund is pressuring McDonald’s to have a third party audit its policies and procedures in light of a controversy over text messages from CEO Chris Kempczinski to Chicago Mayor Lori Lightfoot.

SOC Investment Group, formerly known as CtW Investment Group, wants McDonald’s to conduct a “civil rights audit,” saying the company’s practices do not match its statements last year in the wake of protests following the death of George Floyd.

Specifically, SOC mentioned that 72% of front-line workers are from underrepresented groups, compared with just 29% of the company’s leaders. It also highlighted lawsuits from 238 current and former Black franchisees accusing the company of “systemic and covert racial discrimination.”

It also highlights a lawsuit from Weather Channel owner Byron Allen accusing the company of discrimination in ad spending.

“A civil rights audit will help McDonald’s identify, remedy and avoid adverse impacts on its stakeholders,” SOC said in its statement. “We urge McDonald’s to assess its behavior through a civil rights lens to obtain a complete picture of how it contributes to social and economic inequality.”

McDonald’s has made numerous promises over the past 18 months on diversity. The company said it will increase its purchases with diverse-owned suppliers by 10% and will spend more on diverse-owned media. The company also began working with suppliers on mutual efforts to increase efforts on diversity in hiring and promotions.

The company has also set diversity, equity and inclusion representation goals and plans to base part of top executives’ bonuses on meeting them.

“McDonald’s is serious about holding ourselves accountable to our public commitments to drive equitable opportunity for all, commitments we make public, along with our transparent disclosures to diversity, equity and inclusion data, on our corporate website,” the company said in a statement.

Still, the SOC request comes as McDonald’s record on civil rights is under renewed scrutiny in the aftermath of Kempczinski’s text. In April, Kempczinski called “tragic” a pair of shootings of children, 13-year-old Adam Toledo, by Chicago police, and the 7-year-old Jaslyn Adams as she sat in a McDonald’s drive-thru.

“Both the parents failed those kids, which is something you can’t say,” Kempczinski wrote. “Even harder to fix.”

The text has generated protests, some of which go as far as to call for the CEO to step down. Kempczinski apologized for the text in a video to the system earlier this month.

SOC has been pushing companies to conduct civil rights audits, working with the service union SEIU. It has particularly targeted financial institutions, including Bank of America, Wells Fargo, Citi, Goldman Sachs, Morgan Stanley, JP Morgan, State Street and Black Rock.

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