Aug 22, 2023 - Economy

The affirmative action fight over big business is already here

Illustration of a pattern of briefcases in different skintones.

Illustration: Maura Losch/Axios

The Supreme Court decision outlawing affirmative action in college admissions upended higher education. Big business could be next.

Why it matters: Corporate America has a diversity problem. Pushing companies to ignore race and background when recruiting could make things worse.

  • Some 89% of CEOs and CFOs leading the biggest companies in the U.S. are white, according to a paper in the Journal of Accountancy that examined 681 firms in the Fortune 500 and S&P 500.

What’s happening: Edward Blum, the man who led the legal fight against affirmative action in higher education, is setting his sights on private companies, he told the Boston Globe in an interview.

  • Blum's latest target is Fearless Fund, an Atlanta-based venture capital fund co-founded by three black women, which is focused on startups led by women of color, Axios' Dan Primack writes.
  • Reality check: Black founders raised just 1% of all VC funding in 2022.

Between the lines: "[T]he Court in the higher ed affirmative action cases has expressed hostility to race-conscious efforts to improve racial equity," Pauline Kim, a professor at Washington University in St. Louis, tells Vox.

  • "And that may encourage people who are ideologically inclined to challenge any kind of race-conscious or race-remedial efforts to try to bring lawsuits to challenge what employers are doing."

What to watch: Lawyers are warning companies to review their DEI policies to protect against legal fights.

  • Quotas, like those designed to increase diversity on company boards, are the most likely to face lawsuits, the Globe reports.

Worth noting: There are also DEI efforts that have proven effective in the workplace that don't fall under the umbrella of affirmative action, Kim told Vox.

  • For example, a company's decision to stop relying on word of mouth to recruit applicants is likely to result in a far more diverse pool of candidates.
  • That practice isn't affirmative action, but still works to diversify the workplace.
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