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07 September 2023 / Essay
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Copy LinkIn light of the recent US Supreme Court decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, companies are taking a fresh look at their diversity, equity, and inclusion (DEI) policies and practices. While still embracing DEI as a key driver of business success, they are re-evaluating their initiatives for legal and reputational risk.
In this environment, companies should be prepared to receive shareholder proposals for the 2024 proxy season relating to “racial equity and civil rights audits,” which call for independent reviews of the impact of companies’ policies and practices on groups that have been subject to a history of discrimination. When these proposals were introduced in 2021, they were often used to test whether companies’ actions relating to equality matched the statements they issued during the social unrest of 2020. Since then, these proposals have been submitted by both sides of the debate on DEI. Even though shareholder support for these proposals dropped in 2023, they (or the next generation of them) are poised to stage a comeback in 2024. First, the Supreme Court’s decision will likely serve as a catalyst for proposals relating to DEI. And second, the shareholders who submit these proposals are often not concerned about the proposals passing
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