At Public Companies, It’s All Quiet on the DEI Front

Public companies haven’t had much to say lately about diversity, equity and inclusion initiatives. Avoiding the conversation hasn’t stopped the momentum against so-called DEI programs, though.

In July, Attorney General Pamela Bondi released new Department of Justice guidance outlining the kinds of DEI programs the agency believes run afoul of federal anti-discrimination laws. The document lays out specific practices the DOJ considers unlawful or presumptively discriminatory, along with nine “best practices” aimed at keeping organizations compliant. The guidance applies broadly to any entity covered by those laws, including public and private employers, schools, and contractors.

The newly issued DOJ guidelines take special issue with policies centered around “protected characteristics like race, sex, color, national origin, or religion.” For example, raced-based scholarships, hiring policies and leadership programs are unlawful, according to the memo. It implies the Justice Department will have wide latitude to interpret what runs afoul of the guidance, extending its prohibitions to “proxies for protected characteristics” such as geographic preferences. Additionally, the guidance places responsibility on recipients of federal funding to make sure those resources do not support “third-party programs” engaged in what the DOJ deems discriminatory practices.

Among the DOJ’s best practices to keep entities compliant with its guidelines: Ensuring that “all workplace programs, activities, and resources should be open to all qualified individuals, regardless of race, sex, or other protected characteristics.” DOJ also advised ending “any program or policy designed to achieve discriminatory outcomes, even those using facially neutral means.” Entities should also evaluate the criteria underpinning their programs and policies to weed out proxies for factors such as race and sex, according to the guidance.

Of note to corporate America, the DOJ guidance draws up a roadmap for whistleblowers and lawyers to take legal action against businesses for maintaining DEI initiatives. “Protection against retaliation” is one of the key points articulated in the memo.

“DOJ’s new guidance is already influencing enforcement strategy and will likely serve as a template for False Claims Act whistleblowers,” said lawyers from Fenwick & West LLP in a commentary on the DOJ memo. “Companies that directly or indirectly interact with federal funds should review their practices immediately.”

It seems that companies are way ahead of the federal government – at least in terms of tamping down their messages about DEI. An analysis of 2025 corporate filings by Winston & Strawn LLP earlier this year found that 68 of 74 Fortune 100 companies “parsed back references to DEI initiatives in their proxy statements in at least some way,” such as reducing the visibility of features like diversity matrices.

The proxy statement of Equifax Inc. offers a prime example of how companies’ approaches to DEI changed in their disclosures from 2024 to 2025. In a section of the report dedicated to changes to board composition, Equifax noted last year that it had added three female members and one racially diverse director since 2020. The company omitted those distinctions in the ’25 edition. Similarly, a passage on identifying potential board members in this year’s proxy statement added “professional background” and “education” to “gender, age, race and ethnicity” in a discussion of the diversity of candidates.

Meanwhile, the tone of shareholder proposals related to DEI is changing. Against a backdrop of declining submissions overall, the share of proposals against environmental, social and governance initiatives increased from ’24 to ’25. Proposals intended to dilute or eliminate DEI programs nearly doubled during that same period, up from 23% last year to 40% this year.

Corporate shareholders, however, haven’t shown much interest in joining the anti-DEI movement. For instance, a proposal to remove DEI-related performance goals from executive pay packages at Coca-Cola received just 1.1% of stockholders’ votes in support. At 30 of the largest U.S. companies, shareholders struck down all anti-DEI proposals this year. Most received less than 2% of shareholders’ votes.

As such, the divide over DEI between the DOJ and investors appears stark: The federal government is using its regulatory bullhorn to decry the programs, but they still have broad support from shareholders. No wonder the companies have so little to say.