American Family CEO pushes for answers to mass incarceration
The high number of African Americans in U.S. prisons and jails today is an impediment not only to social justice, but to the future of business in the country, the top executive of one of Wisconsin’s largest companies said Tuesday in Milwaukee.
During his speech at an event honoring the Deloitte Wisconsin 75 top privately and closely held companies in the state, Jack Salzwedel, chairman and chief executive officer of American Family Insurance, said there are more black American males in the penal system now than were enslaved at the height of slavery.
“And it’s something that needs to be addressed because as a business this is an important issue for us, not just as a ‘feel good,’ ” Salzwedel told about 175 attendees — most of them fellow business leaders — at the Saint Kate hotel. “This is an important issue for us as we think about our markets, demand for our products, the workforce, all of these things.”
Said Salzwedel: “I truly believe that if people will be looking back 50 years from now at this time right now, that they’ll look at what’s going on with the mass incarceration movement right now and they’ll look at us the same way that we look back 100 years and look at slavery. And I know that’s a controversial thing to say, or might be
controversial. But I really believe that.”
Salzwedel, who has been chairman and CEO of Madison-based American Family since 2011, said it may be up to private companies in the U.S. to address social concerns the government is unable to handle.
“We feel very strongly that some of these types of social issues are not going to be addressed by our politicians, by our government, but actually the business community could take stands on some of these hot issues and can be leaders as we think about this going forward,” Salzwedel said.
In November, the board of American Family will be traveling to Montgomery, Alabama, to tour the National Museum for Peace and Justice, a museum opened last year on the site of a former warehouse where enslaved African Americans were imprisoned, he said.
“It’s going to be a changing event for our board as they view this issue differently than they maybe have viewed it in the past,” he said. “And I think it’s important for us as businesses overall to be willing to look at these issues and make stances on it.”
American Family is the fourth-largest company on the Deloitte Wisconsin 75 list, with revenue of about $10.2 billion in 2018.
Salzwedel noted that the national organization the Business Roundtable recently updated its “Statement on the Purpose of a Corporation” so that it no longer says a company’s principal role is to serve shareholders, but, instead, to be run for the benefit of all stakeholders — customers, employees, suppliers, communities and shareholders.
“This is a start for us as businesses in terms of how we deal with our communities and how we deal with our people,” said Salzwedel. “I think it’s an amazing step and actually a great first step, and I think we do need to hold our feet to the fire in terms of making sure we deliver on those promises.”
Selzwedel, 59, a native of DeForest who started his career with American Family as a claims adjuster in 1983, said attracting and retaining a diverse workforce is “critically important” to the company.
“How do we view diversity inclusion as an organization? We know that team performance increases as you have more diverse teams in your organization. That’s been proven,” Salzwedel said. “But there’s also a front-end investment that’s needed.”
That’s a key reason American Family has been scouting locations in the city of Milwaukee for opening a technology hub. Milwaukee’s population is more racially diverse than Madison’s.
It’s up to the company to make a diverse workforce feel welcome, he said. The company has about 13,800 employees nationwide, including 5,850 in Wisconsin.
“Ten years ago we were losing people from the organization because they didn’t fit into the mold of the American Family of the past 85 years,” Salzwedel said. “So there were ways they just selfselected out of the organization because they weren’t comfortable.”
American Family has worked to change that, he told the group. Then he flashed a photo of Albert Einstein, featuring the scientific genius’ wild head of white hair, on screens flanking the podium.
“We have a saying at American Family that is basically, ‘If you want Einstein, you’ve got to put up with the hair,’” Salzwedel said.
Salzwedel also suggested that $15 an hour — a minimum amount sought in many efforts to raise wages — may not be enough.
“I will just say livable wage at $15 an hour to me doesn’t seem like much of a livable wage,” he said. “So we’ll be looking at moving that up significantly with our plans for 2020.”
Salzwedel was the keynote speaker at the 17th annual Deloitte Wisconsin 75 event, in which clients of the accounting and consulting firm are ranked by annual revenue. The companies on the list represent various industries.
Among this year’s 75 were five that received Distinguished Performer awards. These special awards recognize how companies are successfully addressing challenges around local and global competition and staying accountable to their communities and employees, according to Deloitte.
This year’s Distinguished Performers: Community, Robert W. Baird & Co.; Diversity, Secura Insurance; Innovation, Church Mutual Insurance Co.; Succession, Sargento Foods Inc.; and Sustainability, Promega Corp.