A New Era of Scrutiny for Diversity, Equity & Inclusion
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A New Era of Scrutiny for Diversity, Equity & Inclusion

/ Essay

June 29, 2024, marks the one-year anniversary of the landmark Supreme Court decision Students for Fair Admissions v. Harvard, which eliminated affirmative action in college admissions. Following the court’s decision, there has been backlash against companies’ diversity, equity & inclusion (DEI) policies and programs focused on specific underrepresented racial groups; and reverse discrimination lawsuits (i.e., claims of discrimination against members of a majority rather than minority).1 According to data from The Conference Board, 62% of surveyed executives believe the court’s decision has negatively affected their firm’s diversity efforts, 53% expect scrutiny on corporate diversity efforts to increase over the next three years, and 66% consider the current environment surrounding corporate diversity efforts to be very or extremely challenging.

June 29, 2024, marks the one-year anniversary of the landmark Supreme Court decision Students for Fair Admissions v. Harvard, which eliminated affirmative action in college admissions. Following the court’s decision, there has been backlash against companies’ diversity, equity & inclusion (DEI) policies and programs focused on specific underrepresented racial groups; and reverse discrimination lawsuits (i.e., claims of discrimination against members of a majority rather than minority).1 According to data from The Conference Board, 62% of surveyed executives believe the court’s decision has negatively affected their firm’s diversity efforts, 53% expect scrutiny on corporate diversity efforts to increase over the next three years, and 66% consider the current environment surrounding corporate diversity efforts to be very or extremely challenging.

These challenges are also unfolding in the proxy season. As of May 31, 2024, the number of diversity-related shareholder proposals (e.g., on topics such as workplace diversity, EEO-1 data disclosure, and board diversity) going to a vote at Russell 3000 companies almost doubled from the same period in 2023, from 13 to 25. Unlike last year, when companies and shareholders were often able to reach a compromise on shareholder proposals relating to DEI topics (including gender/racial pay equity and racial equity audits), most companies receiving a DEI-related proposal have not been able to avoid a vote this year (11 DEI-related proposals have been withdrawn thus far in 2024 versus 34 during the same period in 2023). Moreover, DEI has been a growing focus of conservative shareholders who have ramped up their anti-environmental, social & governance (ESG) activity this y

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