Anti-DEI shareholder proposals tripled since 2020
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Anti-DEI shareholder proposals have surged over the past few years.
Why it matters: These measures are a somewhat obscure but important piece of the pushback against corporate diversity, equity and inclusion (DEI) efforts — programs meant to broaden a company's hiring pool of candidates and make employees from different backgrounds feel more welcome.
The big picture: Corporate diversity efforts are quickly falling out of fashion, especially as President-elect Trump heads back to the White House.
- Companies, like Meta, that used to tout their diversity efforts are now rapidly running away from them.
Zoom in: Anti-DEI proposals typically ask public firms to scrutinize their DEI policies to see if they pose legal, financial or reputation risks.
- There were 13 anti-DEI proposals at Russell 3000 firms last year, according to research provided to Axios by the Conference Board.
- The number of anti-DEI proposals is still a fraction of the pro-DEI proposals, but has more than tripled since 2020.
- The companies targeted were biggies like Alphabet, Apple, Coca-Cola, Starbucks and Boeing, which dismantled its DEI department last year.
Zoom out: Critics say DEI pushes companies to hire less-qualified candidates. They blame the three-letter acronym for all kinds of things (plane crashes, domestic terrorism, infrastructure collapse).
- Their opposition got a huge boost in 2023, after the Supreme Court overturned affirmative action at the university level.
- After the ruling came down, scrutiny of company programs grew, and some groups began filing lawsuits against corporations for, effectively, discriminating against white people in hiring.
- Of 70 senior executives recently surveyed by the Conference Board, 69% said the ruling negatively affected their DEI efforts.
State of play: Over the holidays, Costco grabbed headlines when it put out a robust defense of its DEI efforts, in response to one of these proposals from a conservative think tank called the National Center for Public Policy Research.
- "Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all," Costco's board of directors wrote.
- "We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed."
The other side: Stefan Padfield, executive director of the Free Enterprise Project, part of the group that filed the Costco proposal, claimed the company's DEI program institutionalizes racism.
- He called Costco's diversity efforts "neo-racism."
Where it stands: These proposals almost always get voted down, but the point isn't to win votes, says Andrew Jones, senior researcher at the Conference Board.
- The idea is to "bring scrutiny to DEI and amplify broader opposition," he says. Those efforts appear to be working.
- Earlier this week, McDonald's was the latest major company to announce it was scaling back its DEI efforts.
