Anti-DEI shareholders attack corporate America’s diversity programs

For conservative groups, losing big at company annual meetings is still winning.

That’s because their growing presence at shareholder meetings simultaneously disrupts management plans and generates headlines, even as their proposals to end corporate diversity programs draw little support from investors.

Every year, companies face hundreds of resolutions from progressive groups to change their policies to better support employee diversity, labor rights and other social issues. By 2022, there were only a few proposals from groups that opposed these initiatives. But as the backlash against diversity, equity and inclusion has intensified in the US, the number of so-called anti-DEI proposals has multiplied.

There have been 42 proposals filed this year by prominent conservative investors who are considered anti-DEI, compared with just one in 2021, according to data compiled by Bloomberg. While they account for more than a third of social issue resolutions filed in 2024, overall support for anti-DEI resolutions averaged 2 percent this year — a fraction of the 18.5 percent support for pro-DEI proposals.

But the conversations the resolutions generate can have “just as much impact” as the vote itself, according to Luke Perlot, whose National Legal Policy Center (NLPC) was one of the leading anti-DEI filings in this year.

“We come in and start hitting them from the right with proposals that are almost against the proposals from the left, and it’s almost like they can now cancel each other out,” Perlot said. To him, the gap between the levels of support for pro- and anti-DEI resolutions is further evidence that corporate America has moved “mostly to one side and neglects the other side of these issues.”

Conservative filings led by the NLPC and the National Center for Public Policy Research (NCPPR) filed 62 percent of this year’s anti-DEI proposals. It is a coordinated campaign targeting certain companies, including Boeing Co., Alphabet Inc. and PepsiCo Inc. The effort comes as corporate America faces a series of complaints and lawsuits that have targeted diversity practices following the Supreme Court’s decision last year to ban affirmative action programs in college admissions.

One of the anti-DEI initiatives that garnered the most support was NCPPR’s demand that Boeing report on the risks created by its DEI strategy. About 5.3% of shareholders supported this proposal. It was among three anti-DEI resolutions to reach the 5% threshold required by the US Securities and Exchange Commission for a shareholder to submit the same proposal twice over a five-year period.

The proxy effort is not anti-DEI, it is “pro-fiduciary” and aims to return companies to “neutrality,” according to Stefan Padfield, director of the Free Enterprise Project at NCPPR.

Groups like NCPPR say their proposals are designed to ensure business leaders consider whether their DEI initiatives lessen a company’s fiscal responsibility and any legal and reputational risks associated with these programs. Progressive activist groups label these proposals anti-DEI because they often require companies to consider whether a policy favors black workers over other groups, rather than asking companies to ensure they treat black workers fairly and Hispanics.

This sometimes means that nuance can be difficult to detect in the language of the proposal summary. A linguistic analysis by Bloomberg found that the wording in the pro-DEI and anti-DEI shareholder proposals was very similar, despite their opposing goals. On certain subjects—such as slave labor in the Congo or human rights in China—the wording may even suggest a common cause.

Creating that confusion may be part of the strategy of these groups whose primary goal is not to win broader investor support but to put pressure on companies, said Heidi Welsh, who runs the non-profit Institute for Sustainable Investment and monitored shareholder votes for more. for three decades. She has tracked more than 80 proposals this year from conservative groups that oppose environmental, social and governance topics, including DEI. These recommendations come at it from a “system breaking perspective,” she added.

“There are people who are actually serious about this and are making policy proposals that they think will make things better,” Welsh said. And there are anti-DEI groups who “just want to blow it up”.

Photo: Pro and anti-affirmative action protesters demonstrate on Capitol Hill in Washington, DC. Photographer: Anna Moneymaker/Getty Images