This is Democracy – Episode 118: Corporations and Social Justice

intro 0:05
This is Democracy, a podcast that explores the interracial intergenerational and intersectional unheard voices living in the world’s most

influential democracy.

Jeremi Suri 0:20
Welcome to our new episode of This is Democracy. Today’s episode is going to discuss the role of businesses and corporations in pursuing social justice and other values in our society today, there often is an assumption, sometimes an assumption actually furthered by those in the academic world and other circles, that there’s a necessary conflict between business and social justice. But a historian would say that, in fact, there have been many moments in our society, certainly not all moments, but many moments when businesses have been a very important positive value for social justice. Again, it’s not always the case. But during our best moments in a democracy, businesses are contributing to social justice. And that’s going to be the topic of our conversation. Today, we’re very fortunate to be joined by Lata Reddy. She’s a senior vice president of inclusive solutions at Prudential financial, and the chair of the Prudential foundation. In these roles, Miss Reddy harnesses the power of capital markets to drive financial and social mobility. By combining diversity strategies, impact investments, philanthropy, corporate contributions and employee engagement with credentials full business capabilities, she helps position the company to promote inclusive economic opportunity and sustainable growth. She has played similar roles and other settings before prior to joining Prudential, Miss Reddy was a civil rights attorney with the US Department of Education. Maybe we’ll get to hear a little bit about that too. And her dedication to promoting equity has spanned her career in the nonprofit public and private sectors. She has a Bachelor of Arts degree in economics from the University of Michigan, and a law degree from Emory University’s School of Law. It sounds like you’re very busy, Lata thank you for joining us.

Lata N. Reddy 2:11
Thank you for having me. It’s great to be here.

Jeremi Suri 2:14
I’m so excited for this conversation. Before we get into that conversation as always, we have our scene setting poem from our podcast poet, Mr. Zachary Siri, Zachary. What is the title of your poem today?

Zachary Suri 2:28
The dream

Jeremi Suri 2:30
we all need dreams these days. So let’s let’s hear about the dream.

Zachary Suri 2:36
Joe Corporation set forth from the plains ignoring the dirt and the pouring rains with this spirit ideal forgotten and rare for the chasing of windmills and laissez faire. And so came the country Squire of capital ideal looking for vagabonds to make a country veal. It is a naive form of freedom, but an admirable scheme, helping ordinary people into an imaginary dream. For the cheeky night among nights of deceit is endearing and hopeful and long months of sleep. He rolls into an inn or an HQ to him, and he stares into the crowd and reaches out a limb. It is true that the arms but a gesture of unconscious jest in a nation looking truly for a drink and some rest. And yes, the moon rocket steed is headed for windmills. But empty hope is hope and hearts can be filled. And just so many this imaginary entity and empty clouds is deeply real shovel in the ground and checks into the suffering crowds. The dirt on the floor is the dirt of the dream. And the janitor sweeps it with the same repetitive theme. The masses were once led by these Knights of the brush. But now there are but three or four stragglers following in a rush. And there may once have been buildings built on such journeys. But the people are filled with other dreams now other worries

Jeremi Suri 3:53
Zachary, what is your poem about?

Zachary Suri 3:55
my poem is really about the sort of naive but inspiring idea of American Corporation, sorry, of American corporations and the pursuit of free markets. But it’s also really raises the question at the end about what is the role of a corporation today in in today’s America?

Jeremi Suri 4:15
Well, that’s the perfect place to talk turn to lots of ready here. Lots of you’ve, you’ve been in this field for so long and seen it from so many different points of view. How has Prudential’s view of its public service role? How has it changed over the last few years?

Lata N. Reddy 4:33
Yeah, well, first, thank you exactly for that. That was amazing. And lots in there to think about so I you know, I would say that Prudential is always understood that private entities have a role to play with respect to public service, and any purpose driven entity are within the same and in fact, Prudential is actually purpose built in the sense that we were created to address a public need. And that was the fact that working families did not have access to insurance products. Now, this was 145 years ago. And that was, in fact, the reason Prudential was created. They’ve been defining moments along the way where we’ve confirmed our commitment to public service, I’d say 1967 was another one of those moments following the civil unrest and cities across the country, including our headquarters of Newark, New Jersey. Many companies chose to leave the city at that moment, but Prudential’s leadership at the time, stepped back and said, you know, what’s the right thing to do here and if the business for the community and ultimately decided that it would stay in the city and help the city rebuild, and change its trajectory from that moment on? And so that’s a commitment we’ve upheld for the past 50. So plus years, we’ve doubled down on that commitment in recent years in terms of our efforts in the city. But what I’d say is, it’s, you know, it’s really a platform that we’ve created, that’s based on our values, and it allows us to be both patient and nimble. And to move with the times, and what the fact is demand.

Jeremi Suri 6:15
And it there is this consistent core values. But it does seem to me also that the context has shaped Prudential and other businesses that have these values. How in the last few years, have you seen those values, find new expression in credentials, activities in different areas.

Lata N. Reddy 6:33
So the state of the world? You know, there are lots of different again, moments, but probably following the events for 2008. And the impacts that that had on so many people and the fact that the wealth disparity was widened, and that people were more conscious of this over the years, I think, in that as well as certainly over the last few months, the simultaneous right crises, that the pandemic brought on, with respect to the health crisis and economic crisis, and then the racial inequities that were laid bare for everyone to see if they weren’t aware of them before, that those things have all sharpened the focus of Prudential certainly, so as I said, right, we had the values president at our founding, we tried to live those values. Now there are moments and we can talk about them where, you know, we weren’t on the right side of history, as would be the case with any legacy company. But again, over the past, you know, several decades have tried to live those in important ways. And over the past few years, I mean, sorry, the past few months, have been very intentional about making sure that our associates, right understand what the company stands for what we’re about what we’re trying to do, and how that is completely intertwined with their business strategy, right, these values don’t stand apart from who we are as a company, and what we’re trying to achieve with respect to our business goals. And so that meant really centering the concept of equity in what we’re trying to do as a business. And really clearly articulating what our own multi stakeholder model even though again, that’s how we’ve operated for decades, but really defining those in a more clear way.

Zachary Suri 8:28
There’s a lot of people, especially young people, and in my peers that I that I’ve talked to who feel that the model of American corporations is outdated, or that the pursuit of profits can’t go hand in hand with the pursuit of social justice, how would you respond to that? And how do you simultaneously pursue profits while also pursuing good?

Lata N. Reddy 8:48
So I would actually say it’s the opposite that you can’t, companies can’t grow without considering the societal impacts, meaning, if you look at the changing demographics alone, so it is clear that our workforce right is and will become inherently more diverse, our customer base, the, you know, regulatory environment, the investors community, that all of our different stakeholders are now looking to corporations in a very different way to understand how we are behaving across these fronts. So there’s certainly the external, you know, macro factors that are impacting that there’s the internal demand from our employees and certain younger generations, right? Who are have the expectation coming into the workplace, that their place of employment is going to be actively engaged in societal issues. And then I would say, again, on the core sort of business strategy piece that the, you know, certainly for certain businesses that may be more commoditized, right. If you’re going to grow, you’ve got to start looking at different segments of the population to grow into and grow with So I would say all of those actually create an imperative that you can’t have profit without purpose.

Jeremi Suri 10:07
That makes a lot of sense. And I really liked the point you made a lot about how you as a successful entity, as a successful organization, have to be attentive to the context, you’re operating in the context of a more diverse country, which is a big theme of our podcast each week, the diversity in our country requires you if you’re going to succeed to become more diverse as an organization, I thought maybe it would be valuable for you to share with our listeners, what that means, in practice, if you could give us maybe an example or to within Prudential, I’ve seen some of your public materials on racial sensitivity and attention, as you mentioned earlier, to your own history as an organization, I think it would be useful to share that with some of our listeners, if you could.

Lata N. Reddy 10:49
Sure. So maybe I’ll start big picture, you know, we think about it as a kind of virtuous circles. So we’re very much focused on the culture of our workplace and making sure that it is fully inclusive and embraces everyone. And not only that, but everybody feels safe and welcome, right, that they can contribute and be successful. We believe so starting with inclusion, and, you know, only then can you have true diversity and broad based diversity at all levels. And then what that will get you right is on the sort of execution side with respect to our business. You know, what we offer as a business will get you the diversity of thinking necessary to create solutions that are going to be more diverse and more inclusive, going forward. And so that’s how we think about it. That’s where the organization that I lead within Prudential, which is called inclusive solutions, how we work across the enterprise with our colleagues to address those three, you know, areas. And so I’ll give you one very, maybe practical example of how this can manifest. So we have Prudential right, has a retirement business. We know that 50%, almost 50% of Americans do not have $400, in emergency savings. Right, a startling statistic. Wow,

Jeremi Suri 12:13
wow.

Lata N. Reddy 12:14
Yeah. And so that presents, right a crisis on its own. And what that means is that people who are fortunate that, you know, even have a retirement plan are often pulling out of that retirement plan. So the leakage right problem. And we know that that’s pronounced, especially for people of color. And so the problems just get compounded. Right? When you think about, again, the wealth disparity by race. And so we saw an opportunity from both right, again, operating at the intersection of business and society to create a bond offering an emergency savings vehicle that allowed people to save, and therefore have access right to have liquidity when they have an emergency, and enable them to not have to dip into the required retirement plans, which again, we know will have a compounding negative factor when they do that. So we partnered with one of our or brought in one of our external partners, a nonprofit that, you know, does this work with our retirement business and my team to really kind of kick the tires on what are the features we would need in this emergency savings vehicle to make it relevant to more financially fragile in populations, and then began to offer that to our retirement clients who are large employers so that they could offer that to their employees?

Jeremi Suri 13:34
And if I might ask, Is this a product that you’re able to profit from? Or are you doing this in a way that’s not profitable for the organization?

Lata N. Reddy 13:45
Well, what it does is it enhances our value proposition to our employer clients, right. So in essence, we’re trying to compete by making sure that we’re delivering on the needs of their employees. And so ultimately, yes, it is, you know, about generating profit, as well as addressing this very pressing societal issue.

Jeremi Suri 14:06
That sounds like such an important program that you put into place. And I can only imagine the number of families that will be saved in many ways by this. drilling down on this just a little further, what role does government play and I don’t just mean federal government, local and state government, oftentimes, people think of government as getting in the way on one side of the political spectrum or on the other side, people think government has to come in and take things over. What What role does government play from your perspective?

Lata N. Reddy 14:36
Yeah, I recently heard you expressed in an interesting way by a colleague who had worked in the government and, you know, he described it is right, setting the context, the government’s role is to set the context so that people who do the right things get rewarded. And that, you know, government really should be incentivizing that behavior, right, that we’re all focused On the things that are really working and trying to get them to scale. And so, you know, I think there’s something to that right government brings different things. The private sector brings different things. And I think inherent right, and what this is about is that need to partner because no one entity can do it on their own. And so, you know, to me, it’s really, whether, depending on the level of government, right, what are their kind of key capabilities? What are they responsible for? And then how can we bring our assets to bear on whatever challenges they’re facing? So for example, the local level, right, if they are doing something around, I’ll say police reform or, you know, safety in their city? How can we, as a corporation, partner with them, you know, how can they, and that becomes a win win, by the way, when you’re located in that community? Right, as a business, we’ve got employees coming into that city every day. And so we’ve got an interest in that the local government obviously has an interest for their residents, we care about the residents as well. So you know, it’s, can we help them on some innovative ideas, right, they might have something that they think can enable better community policing, for example. And perhaps we can fund something right, we’ve got high risk capital that we can put in that can spark some innovation, and partner in that way. So I think they’re different roles that

depending on the level that government can and should play.

Jeremi Suri 16:35
Right, right. And it sounds It sounds so vital, what you’re describing, and and in some way, and in some ways, it’s something that seems intuitive. But in my experience, not all businesses do that, I think of the city of Austin, and there are a lot of businesses we have here that are doing this kind of work and others that aren’t. What is it that that defines the entities that are doing this? And how, what motivates them to get involved beyond their values? I mean, it seems to me that this is an incredible investment that Prudential is making, can you walk us through that decision making a little bit?

Lata N. Reddy 17:12
I think, again, it has to do if you’re really operating, as I said, at that intersection, then you understand that there’s something right, they will be unofficial to the business, there’s something that will be beneficial to society, and that there’s an incentive in that right to continue to do that work. So if you just take, And to me, that’s not only is that fine, right? That’s what it’s gonna take that if you have an opportunity, you think about sort of the spectrum of impacts, and returns, right? And so why wouldn’t you, in my mind, start at the far end on the return side? So obviously, you’d want high returns high impact, right? That would be the ideal place to operate. You could move, you know, further towards the impact and lower on the return scale, that’s fine, too. And you’d like that, right? You can keep changing the equation or the balance. But to me, why wouldn’t you start with the high return high impact, meaning a commercial opportunity that can drive success at scale? So again, the incentive for business is its commercial, it can drive enhance our bottom line. And we’re doing something that, again, it’s hard to what I guess what I’m trying to get to is it’s not just it’s done, and it’s with?

Jeremi Suri 18:41
Yeah, right. Right. That makes a lot of sense. And and it seems to me that we’re seeing along the lines of what you’re describing. So Well, here, we’re seeing many public entities like Prudential doing this, especially in the last few months. I think of sports franchises, right? I think of the NBA, I think of the NFL. But then I also wonder, why did it take so long? And it sounds like Prudential has been doing this work, especially in Newark for a long time since the Civil Rights activities in the late 1960s. But not all entities have? And And do you think that this is really a different moment now for the industry as a whole because of what’s happened with the 2007 2008 recession that you talked about, but also obviously with the civil rights activism, and Black Lives Matter. And the evidence of such a horrible mistreatment of certain groups within our society evidence that we knew was there, but now is so so blatantly in front of us. Do you do you think this is a different moment now industry wide?

Lata N. Reddy 19:41
I do think it’s a different moment. And just to go back to you know, so I think what, in terms of credential, right, we are unique in the sense that we’re a fortune 50 company that is headquartered in a city like Newark that has suffered from decades of disinvestment, and so right there are fewer And fewer corporations if you could maybe name a handful that have that same situation. And so what that means is we’ve had, you know, we’ve been embedded in a community that has suffered from structural barriers, structural racism, right, the systems that have been built over the years that were intended to keep certain parts of the population out, right and behind, namely, black people. And so that experience can’t be discounted, right. So that level of understanding and the fact that we are in the community, right, every day, when we were not in a virtual environment, it gives us a an understanding of sensitivity, and, you know, the ability, right to really work in partnership to address these, these systems, systemic issues. So I think that’s probably why, you know, we’ve been going at it for so long, in a different way. I think this moment, right, is really your moment of reckoning, as you said, and every institution is being called to look within and look outside of themselves as well and understand the impact they’re having. And so you know, there are things entities do that are having a negative impact might be unintentional, but it is still having an impact. And so it’s deeper analysis than right. They’ve had to do in the past. What the hope is that this is people have been saying goes from a moment to a movement, and that it is sustained, right?

Jeremi Suri 21:40
It sounds like you’re describing a movement. Yeah, it has all the elements that we’ve talked about in prior podcast episodes, often with social justice activists, like yourself, but in different settings, you have a mission, you have a clear purpose, and you’ve organized people and resources to pursue that. And you’re raising consciousness. So what you’re describing to me sounds like a social movement. And as we’ve talked about on this podcast, that’s how change happens in democracies, it’s actually very much about grassroots social movements, that that bring change towards the way we view communities and the way we think about policy in our society, and policymakers often are reacting to that. We’ve also talked on the podcast, lots of though about opposition groups, and not necessarily ill willed opposition groups, but how we are a pluralistic society. And oftentimes, achieving equity for some groups means taking privilege away from others. And privilege is very difficult for anyone to give up. How does Prudential and how do other entities that you’ve worked with? How do they respond to stakeholders who have a different point of view and have different economic interests?

Unknown Speaker 22:54
Mm hmm.

Lata N. Reddy 22:56
So a couple of things, the, you know, we talk about both the moral and the business imperative of this. And so, you know, it’s definitely about meeting people where they are, and about hearts and minds. And so if, you know, many people are going to understand the need to do this from the moral imperative lens, it’s absolutely the right thing to do, right, we as a society need to do better. Others are going to come at it purely from the business point of view of Okay, I understand the changing demographics, I understand that my, you know, investors in my business, want me to be doing things in a certain way and have more diverse employees, or a more diverse board, etc. Some are going to, you know, come at it from both points of view. And so that will take care of I think a lot of people, right, helping them see it through one or both of those lenses, I think then there are going to be some who it’s, you know, simply look, this is who we are as a company, these are the values we uphold. These are the expectations about how employees right need to behave and do their jobs. And if that is not something you agree with, or are comfortable with, then this perhaps is not the place for you.

Jeremi Suri 24:13
But I guess what I struggle with and other guests have talked about are situations where you as an organization are fully on board with everything you said, and it sounds incredibly well thought through. But you do have powerful external entities, public, private, governmental. You know, we struggle with this at universities. Sometimes we have powerful stakeholders who don’t want us to do racial sensitivity training and things of that sort. So what can we learn from how you’ve navigated these kinds of issues? Please tell us

Lata N. Reddy 24:47
Well, look, you know, I mean, a lot of it’s about leadership, right? And having the support of leaders of the entity so at you know, Prudential I’m very fortunate to have a we have a board of directors and CEOs Leadership who, who get this and are committed to it and you know, understand. And in fact, each successive CEO, I’ve been around long enough to have worked for several, that there was an understanding, right, when they came into the role and an understanding that the board imparted on them that they were going to continue this work, right. It wasn’t a question of, if Prudential was going to continue to play an active role in society. It was how right what was that CEOs vision for what the company would do next? And so that’s a very different right orientation. And, you know, I think we’ve been fortunate in that we’ve been able to communicate to people who potentially would, as you said, Be those opposing forces externally, why we do, right, what we do, and when you can tie it to the business that you know, as closely as you can, that helps a lot because people understand so you know, whether it’s your shareholders or others that, okay, you’re not, you know, doing something here and giving away all these resources over here that, in fact, the two are connected. And, you know, I’ll do better because you’re doing this other work.

Jeremi Suri 26:08
That that’s such a powerful message. And I just want to underscore it, because you said it so eloquently. And it’s a recurring theme, I think, in the scholarship, and certainly on our podcast, which is that one of the opportunities in a democracy is to create positive incentives for people to do the right thing that actually democracy or pluralist society, as James Madison talked about, it works best when when people are doing good, because doing good things actually provide benefits to multiple communities at the same time, and there are these these opportunities, I think, I think that’s, that’s, that’s how a market society should work. It’s not just profit, it’s mutual benefit. And I’m so impressed with the way you describe that, we always like to close on a positive note. And this has been a very positive hopeful podcast, which we all need right now. For for young people, for my students, lotta who really are eager to roll up their sleeves and make a difference. My students are concerned about the future of our country more so than I think you and I were when we were in college, they’re, they’re motivated to get involved. There’s such an idealistic, involved, engaged generation of students. But they also believe that to survive in society, you have to do well as well, you have to earn an income and they don’t want to take a vow of poverty, how can I help them? And how can they find pathways as they’re starting their careers, to get involved in the work that you’re talking about in multiple different ways? If it’s environmental activities, or social justice on racial and gender lines? How would you recommend they think about and begin their careers?

Lata N. Reddy 27:46
So I think it’s, you know, I have been fortunate that I’ve been able to follow my passion and make that my work. And so I think that is becoming a more a reality for more and more people. Now, given what we just discussed that right, every business is having to look now every institution at how well or not, they are addressing societal issues. And I think so I think there’ll be many more opportunities for younger generations coming up, to find that sweet spot of I can write make a living support myself, and, and my family, whatever right? They need to do, and do it in a job or in a company or a way in an organization that shares my values and acts on those values. And so, you know, I think we’re in a bit of a transition moment, I’d say, definitely kick the tires, and really understand whether it’s, you know, more performative than actual, but I would say, yeah, you know, pursue that passion and, and understand that you can do it and many more ways, and you could have done in the past.

Jeremi Suri 29:01
And I guess, one, one last question on this, because this is so idealistic and practical at the same time, which which I love. How should young people find the entities? Like, what you’re describing Prudential, which will offer them that space? How can they identify them? How can they know when, when an organization is walking the walk and talking the talk? Yeah.

Lata N. Reddy 29:25
So I think, you know, there are all these lists out there now, and I’m not a big list person, but I think they’re helpful and I certainly look at them. And I like to see potentials name on them. But you know, the fortune Most Admired Companies change that fortune change the world list. Just capital has lists of companies, right and ranks companies in terms of how they’re doing on these societal issues. And so, you know, I’d say start there, right, do some research. There’s a lot more information out there, about companies that are squarely focused on this and how they’re doing it and going about it. And you know, then I think, though that will get you so far unfortunately, I think it’s, you know, if you can get to talk to people who are in those companies, right to really get a sense from people who work there, who are leaders there. How they think about it, and how they’re doing the work will give you, you know, the insights you need.

Jeremi Suri 30:21
So, Zachary, what do you think of all this as a young person who is deeply concerned about the future of our country, and someone who, like his dad is a news junkie? How do you think about these issues for your generation? Is, is what latos describing is this powerful and persuasive and attractive to you? What are your reactions, I think

Zachary Suri 30:46
it’s very powerful in the sense that we don’t have to compromise in life, right, telling young people that, that you can be a good citizen and a good business person and live a good life at the same time, which I think is really what our generation is looking for. But I do think also that there is that there is a lot of a lot of spirit in young people to sort of change institutions, from the ground up not just to go inside institutions and try and promote change, but to, but to create new institutions. So I think, hopefully, in the next few years, we’ll see some new corporations and some new new market institutions that will even more promote, I’m sorry, that will promote even more benefiting society and doing good in their communities.

Jeremi Suri 31:30
Right. Right. Well, that makes a lot of sense. And that merges I think, the ethos of the startup with the ethos of the corporation and I think as Lata has has explained that ingenuity and entrepreneurship can can find a home and in in a strong organization like like Prudential a lot of thank you so much for sharing your insights, your experiences, and and most of all, for giving us I think it really inspirational vision of how business and social justice can go together in our society, how they have to go together, and I’m inspired by your words, I hope many of our listeners will be. I encourage our listeners to look up a lot to ready don’t necessarily bombard her email though I’m sure she’ll be happy. But it’s really wonderful to have you on thank you for sharing your insights with us.

Lata N. Reddy 32:23
Thank you very much for having me.

Jeremi Suri 32:26
And Zachary, thank you as always, for your wonderful poem. And most of all, thank you to our listeners who have joined us for this episode of This is Democracy.

outro 32:42
This podcast is produced by the liberal arts development studio and the College of Liberal Arts at the University of Texas at Austin. The music in this episode was written and recorded by Harrison Lemke and you can find his music at Harrison lemke.com.

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Transcribed by https://otter.ai