Boards

Is DEI A Program Or A Core Value?

As Molson Coors became the latest company to publicly announce that it will be ending diversity, equity and inclusion policies, it appears more corporate boards are re-thinking their position on DEI and its impact on their company’s bottom line.

Already this year we’ve seen Tractor Supply, John Deere, Ford, Lowe’s and Harley-Davidson announce that they are eliminating DEI initiatives. Apparently these companies believe there is some value in announcing that they will no longer have policies that are intended to maintain “core values” that include having a diverse workforce, treating all employees equitably and including members of all groups in the basic operations of the company when appropriate. Or perhaps they believe that there is some detriment to having publicly stated that they support measures meant to ensure diversity, equity and inclusion in their workplace and they want to protect the company from backlash.

Whatever the reasoning, it appears this has become a major issue for corporate board agendas this year. It also appears that some boards have decided that there is less risk in ending DEI initiatives than in being targeted by backlash from conservative activists.

So how will your company approach this matter? Here are some questions that might come up during board meetings:

Does the company consider DEI a core value or a program? If the company has previously stated that it has a commitment to diversity, what message does ending diversity initiatives send? What message is the company sending its workforce when it states that it no longer insists on equitable treatment for all employees? If the company is well-known for its stance as an entity that is supportive of DEI principles, has the board projected the potential impact abandoning that reputation may have on the company’s bottom line?

How will ending diversity initiatives be explained to employees and stakeholders? For companies that made major announcements about implementing DEI initiatives, walking them back may need to be handled very delicately so that it is not viewed as a betrayal. Internally, employees may need to be reassured that any support programs intended to help them advance in the company will be maintained and made available in an equitable fashion. The company may need to reach out to stakeholders in the community and assure them that the commitment to DEI principles will be maintained even though public pronouncements ending DEI initiatives have been made.

Are DEI principles integrated into the company’s current business model? And if so, how will announcing a retreat from those principles impact future business? For some companies, expanding their consumer base may mean focusing on more diverse audiences than they have in the past. The future growth of the company may depend on it. Public announcements that indicate that diversity is no longer important to a company may have unintended consequences. Corporate boards may have to decide if they can convince many of their stakeholders that they can uphold DEI principles while at the same time saying that they are abandoning those principles. Such actions may create a trust issue for some corporate boards.


Matthew Scott

Matthew Scott is the former managing editor of the Financial Times’ Agenda newsletter. Based in New York, he writes about corporate governance and investing topics.

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