Backlash erupted on social media this week after a report that Wells Fargo (WFC) CEO Charles Scharf said in an internal memo in the aftermath of the killing of George Floyd that the company’s lack of diversity arose from a “very limited pool of black talent.”
The comments renew concerns not only about the hiring pipeline at major corporations but also about venture capital’s failure to give loans to female and non-white founders, who receive a tiny fraction of startup capital that might propel the companies they already lead.
Corporate America needs to shake itself out of its longstanding preconceptions about what a successful business leader looks like, actress Jessica Alba, founder of beauty products and home goods business The Honest Company, told Yahoo Finance’s editor-in-chief, Andy Serwer, on Sept. 17, before the report about Wells Fargo.
“There might be a mentality in corporate America that you have to be a cut-throat white middle-aged guy to be successful,” says Alba, who is Latina. “Today, on your channel, we can show that none of that is true over here.”
“We are the antithesis of all of that,” she adds. “We're successful and people are happy.”
Female founders received 2.8% of startup investment in the U.S. last year, according to a report released by Crunchbase in April. The share of venture capital drops even further for female founders of color, who receive less than 1% of overall funds.
The Honest Company, founded by Alba in 2012, raised $100 million at a $1.7 billion valuation just three years later, according to Forbes. In May, the company was on pace for more than $350 million in sales for 2020, CEO Nick Vlahos told Vogue Business in May.
Alba currently stars alongside actress Gabrielle Union on the TV show “LA’s Finest,” making it a rare show led by two women of color.
“I really took a lot of the values and the discipline and the convictions, frankly, that I applied to building the Honest Company, and I wanted to apply a lot of those values into ‘LA's Finest,’” Alba says.
“You don't see a ton of leaders that are Black and brown at the same scale in corporate America or in entertainment,” she adds.
The Honest Company’s standards feature a “No List,” which includes 2,500 chemicals that The Honest Company declines to include in its products, as well as a commitment to partner with safe and transparent manufacturers, among other measures.
Alba said the emphasis on safe products and ethical business practices owes in part to the company’s commitment to serving a diverse clientele.
“Black and brown communities are affected the most when it comes to exposures to unnecessary chemicals and how it can affect their health,” she says. “I really wanted to make sure that I make my products accessible to everyone.”
Alba spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Over the years, The Honest Company has faced accusations that it fell short of its vow to keep certain chemicals out of its products while preserving their efficacy. In 2017, the company paid $1.55 million to settle litigation claiming the company misled customers about the ingredients in its laundry detergent and dish soap.
Addressing past accusations that the company fell short of its mission, The Honest Company issued the following statement: “Over the last eight years, like every company, Honest has had challenges along the way. However, instead of letting our challenges define us, we’ve learned from them and are moving forward in the right way by driving innovation and real change.”
“We shifted our focus away from building a broad portfolio and back to the core products that drove our initial growth (i.e. baby, beauty and personal care) and introduced processes and procedures to guarantee an even higher degree of safety, quality and effectiveness,” the statement adds.
Asked about President Donald Trump, Alba said that politics don’t influence how the company operates.
“I think whoever is in office doesn't necessarily affect the way that we run our business,” she says. “The way we run our business is independent of politics.”