Shareholder meetings at American companies have long been a forum for progressive activists to promote diversity-based hiring goals and other favorite causes.
Now, conservatives are using the same tactics against their diversity, equity, and inclusion (DEI) efforts.
Behind boardroom doors and annual meetings, right-wing shareholders are voting on proposals designed to thwart DEI efforts.
While they are not gaining ground yet, they are gaining pace.
In 2021 alone, prominent conservative investors put forward only a single anti-DEI proposal.
Boeing is one of the companies in the crosshairs of conservative shareholders over the company’s DEI rules
This year, they have already filed 42, according to a Bloomberg analysis.
Luke Perlot of the National Legal Policy Center (NLPC) was behind several shareholder efforts.
“We came and started attacking them from the right with proposals that were quite contrary to the proposals put forward by the left,” says Perlot.
“It’s almost like they can cancel each other out now.”
Supporters of DEI initiatives say they help bring more women and minority talent into companies.
But critics call them a form of “reverse racism” that deprives white, heterosexual men of opportunities regardless of who is more qualified.
In recent years, progressive groups have introduced hundreds of resolutions at shareholder meetings calling for corporate policies to be more supportive of employee diversity, labor rights and other social issues.
But as the backlash against DEI has intensified, the number of so-called anti-DEI proposals has multiplied.
This year, anti-DEI resolutions accounted for more than a third of resolutions on social issues.
They were mostly rejected, garnering only 2 percent support, on average.
Pro-DEI proposals remained far more popular in shareholder votes, garnering 18.5 percent support overall.
Perlot says this shows how American corporations have become too progressive and have moved “mostly to one side and are neglecting the other side of these issues.”
Still, he adds, getting executives to debate proposals can have “as big an impact” as the vote itself.
Conservative activists say they are right, even if shareholders don’t back their anti-DEI proposals
Perlot’s group and the National Center for Public Policy Research (NCPPR) submitted nearly two-thirds of this year’s anti-DEI proposals.
It is a coordinated campaign targeting Boeing, Alphabet, PepsiCo and other major companies.
One of the most widely supported anti-DEI initiatives was a request by NCPPR for Boeing to report on the risks created by its DEI strategy.
5.3 percent of shareholders supported this proposal.
It was one of three anti-DEI resolutions to meet the 5 percent threshold required by the U.S. Securities and Exchange Commission for a shareholder to submit the same proposal twice in a five-year period.
Stefan Padfield, director of NCPPR’s Free Enterprise project, says DEI efforts make businesses less competitive.
Fighting DEI is “pro-fiduciary,” he says, and helps companies return to “neutrality.”
NCPPR and others say their proposals are designed to ensure that business leaders consider whether their DEI initiatives detract from the company’s fiscal responsibility and the legal and reputational risks associated with them.
Progressive activists label these proposals as anti-DEI because they often ask companies to consider whether a policy favors workers of color over other groups.
Instead, they should ask companies to make sure they are treating black and Hispanic workers fairly, they say.
This sometimes means that it can be difficult to spot nuances in the language of the proposal summary.
Bloomberg’s analysis found that the wording of the pro-DEI and anti-DEI shareholder proposals was very similar, despite their opposing goals.
On certain issues – such as slave labour in the Congo or human rights in China – the wording can even suggest a common cause.
Creating that confusion may be part of a strategy by these groups whose main goal is not to win broader investor support but to pressure companies, said Heidi Welsh, who runs the Sustainable Investments Institute, a nonprofit organization.
The institute has monitored shareholder voting for more than three decades.
Welsh tracked more than 80 proposals from conservative groups this year that oppose environmental, social and governance issues, including DEI.
These recommendations are made from a perspective of “destroying the system,” he says.
Stefan Padfield, left, and Luke Perlot are among conservative activists fighting for DEI in the boardroom.
“There are people who really take this seriously and are making policy proposals that they think will make things better,” Welsh says.
Some anti-DEI groups “just want to destroy it,” he adds.
The effort comes as U.S. companies face a flurry of complaints and lawsuits targeting diversity practices following the Supreme Court’s decision last year to ban affirmative action programs in college admissions.
America First Legal, a conservative group made up of former members of the Trump administration, has filed more than 30 complaints with a top U.S. civil rights agency and sued IBM’s Red Hat, among many other companies.
Meanwhile, former President Donald Trump says he will fight DEI if he wins the November election, while consumers criticize Harley-Davidson, John Deere and other companies they see as “becoming more conscious.”
Many companies that adopted DEI policies in the wake of the police killing of unarmed black man George Floyd in May 2020 have backed away from them for fear of angering conservative customers.
For some, DEI programs are important and necessary, as they can help overcome historical racism and sexism and make it easier for people of all backgrounds to advance in education and work.
Critics say it is a form of reverse discrimination that unfairly affects straight white men.
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