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Chip Bergh: ‘Leaders Must be Ethical, Or They Won’t Be Successful’

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Throughout its 168-year legacy, Levi’s progressive political stance has been clear. The company was one of the first to racially integrate its factories in the 1940s—long before the legal mandate—and was the first Fortune 500 company to offer domestic partner benefits for same-sex couples.

For the past decade, Levis Strauss & Co. president and CEO Chip Bergh has carried the progressive torch, publicizing his stance on issues like gun violence and voter suppression. Though some have criticized him for connecting business and politics, Bergh has long taken the stance that business leaders “have a responsibility” to create change. And now, as the world emerges from some of the most emotionally charged moments in recent history, this responsibility is becoming increasingly clear.

“[During 2020,] empathy really rose to the top as an important leadership skill,” Bergh said during a podcast with Fortune’s Ellen McGirt for the Aspen Ideas Festival. “We are going to see leaders either evolve their leadership skills or practices, or they won’t be successful, and new leaders will emerge that have those character traits.”

Consumers are increasingly paying attention to companies that lead with ethics. In response to the numerous delayed payments and canceled orders throughout the fashion industry at the start of Covid-19, campaigns like #PayUp, a social media movement calling on corporations to follow through on their financial obligations, and the Worker Rights Consortium’s Covid-19 Tracker, a list of companies acting responsibly and irresponsibly toward suppliers and workers, called out some of the biggest offenders and demanded change.

Likewise, the whole world was watching as the U.S. experienced both a global pandemic and a racial reckoning that caused individuals and companies alike to examine their own contribution to structural racism. And despite Levi’s largely progressive reputation, it was clear the company needed to do better.

In June 2020, the denim giant published its first diversity report, which showed that while its overall global workforce skews female at 57 percent, males make up 59 percent of leadership positions. Further, its leadership team is 73 percent white, 16 percent Asian, 6 percent Latinx and 2 percent Black/African-American—and its executive management and board of directors are even less diverse.

During that time, Bergh sat down with members of Project Onyx—Levi’s Black Employee Resource Group (ERG)—to understand what it was like to be a Black employee at Levi’s.

“Listening to these Black leaders talk about how difficult it is to live in San Francisco; the micro aggressions that they faced inside the company; the challenges that they have looking up the company hierarchy and not seeing someone like them—it was gut wrenching,” he said. “It is my biggest failure as a CEO that we are not where we need to be, and that means that we’re not the company we have the full potential to be.”

Bergh added that all levels of the company must better reflect Levi’s diverse consumer base. He pledged to share annual updates on employee demographics and diversity statistics, publish wage equity audits every other year and appoint a Black leader to join its board of directors. Later that year, the company named Elizabeth A. Morrison chief diversity, inclusion and belonging officer, and followed up by appointing Ulta’s Elliott Rodgers to its board of directors.

By taking these steps, Bergh hopes to inspire other leaders to lead with ethics and create the change they want to see in the world.

“If we fail to take action on the structural racism that exists in this country, and on the social inequities that exist in this country, it will be a missed opportunity,” he said. “If you fail to act as a leader, you’re complicit in structural racism.”

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