DEI: D.O.A. or Here to Stay?

In January of 2021, we wrote on this blog: “If there was ever a time when public companies tried to remain apolitical, it appears to be gone.” We were less than a week removed from the Jan. 6 insurrection in which protestors, enflamed by outgoing President Donald J. Trump, stormed the Capitol building in Washington in an effort to overturn the results of the 2020 election. It seemed at the time as though companies ranging from Sony to Ben & Jerry’s couldn’t move fast enough to let the world know they denounced the riots.

Well, it’s been a long three years. “Apolitical” seems to be back in vogue in corporate America, thanks in large part to an organized backlash against diversity, equity, and inclusion initiatives.

A series of factors are prompting companies to dial back their DEI talk as boards of directors assess the value of the programs. Criticism from influential figures in the world of big business, like billionaires Bill Ackman and Elon Musk have served to foment opposition against DEI in general. Meanwhile, the Supreme Court helped fuel the anti-DEI movement by ruling last year against the consideration of race in college admissions. The decision from the highest court in the land led to a wave of corporations re-evaluating their DEI policies to ensure they were on solid legal ground.

Emboldened conservative activists apparently interpreted the Supreme Court ruling as one of many signs that members of the public were growing weary of corporate political correctness. For example, the same person who spearheaded the attack on Harvard University’s affirmative action policies, Edward Blum, led a similar charge in 2023 in the legal industry. In response to a discrimination lawsuit filed by Blum’s American Alliance for Equal Rights, major law firms such as Morrison Foerster and Winston & Strawn broadened the criteria for their diversity fellowship programs to include all races.

It might be more accurate to characterize the current mood as more of a retrenchment than an outright repudiation of DEI, though. Even in the wake of the Supreme Court’s ruling in the Harvard case, employment law hasn’t changed. Additionally, research shows that workers still like DEI programs, which is hard to square with opponents’ claims that diversity initiatives are harming performance.

And keep in mind that the final boss of “get woke, go broke” politics, Florida Governor Ron DeSantis, just abandoned his campaign for the GOP presidential nomination after one state primary. The massive (culture) war chest accrued by DeSantis’ camp produced possibly the biggest boondoggle in the history of presidential campaigns, suggesting his candidacy represented wishcasting by wealthy donors more than a winning message with voters.

In the end, it seems fair to say stakeholders are sending mixed messages to corporate executives about the future – and the present – of DEI programs. Check back here in three years to see if they have more clarity.

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