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Starting late last year, employers in the US and beyond began rewinding diversity, equity and inclusive policies. This deepens the divisions among already biased discussions and raises important challenges for managers.
Ford, John Deere, Walmart, McDonald’s, Accenture, Meta are those who have publicly diluted or terminated day policies. Of the top 400 companies on the S&P 500 index, 90% have filed an annual report since Donald Trump’s election cut at least some mentions to the DEI, and many have completely abandoned the term. The scale and timing show that after George Floyd was killed in 2020, companies suddenly reversed from a movement across a wide range of industries as they rushed to make DEI efforts a central pillar of their strategy.
However, the actual changes are more subtle than the heading. Although not all, in many cases, businesses relocate some of their policies rather than completely abandoning them. However, the recent rollback has sent a clear signal to society about its assessment of diversity and inclusion at the top level of Wall Street and management.
There is already some evidence of the outcome, including a decrease in the number of companies offering programs for women’s progress. The Association for Advancesing Business Schools at Universities, which accredits more than 1,000 business schools around the world, recently removed diversity and inclusion from reporting standards.
Test it yourself
This is the 11th in a series of monthly business school-style educational case studies dedicated to the responsible business dilemma. Read text and articles from FT and elsewhere, and consider the questions raised after being suggested and linked within the piece.
The series forms part of a broad collection of FT’s “Instant Education Case Study” that explores business challenges.
About the author: René Bucker is a professor of comprehensive entrepreneurship, working at the University of Tilburg, and Johannes Bogerschasen is an assistant professor of marketing at the Erasmus University School of Rotterdam Management.
Opponents of the largest DEI policies tend to equate them with “oriented” and “toxic” working environments. Such policies are portrayed as fundamentally unfair and contradicting the principles of meritocracy. They point to the lack of enthusiasm and potential boycotts from stakeholders (such as customers and investors) who do not want to be associated with the products or services of companies with large DEI policies.
For example, agricultural equipment retailer Tractor Supply said in June 2024 that he “heard from a customer that he was disappointed with,” and that he pledged to “retire” his diversity goals and climate pledge. Dei’s opponents argue that Dei could lead to worsening shareholder returns.
Critics have also questioned the legality of several initiatives during the period of reverse discrimination lawsuits following the US Supreme Court’s decision to break down positive actions in higher education in June 2023. Meta referred to the “legal and policy environment of shifts” when reversing DEI policies in January 2025.
However, supporters of the wider DEI efforts have argued for fair representation. They argue that employees should resemble the population the company serves. Advocates argue that policies are necessary to correct the wrong ones, and can point to research suggesting that they do not harm business performance.
Some evidence suggests that board diversity promotes discussion and evaluation of alternatives, leading to better decision-making. Furthermore, actively discriminating people from specific jobs due to discrimination results in suboptimal talent allocations and reduces economic growth.
Advocates are also concerned about the broader and potentially unintentional consequences of current rollbacks. This can affect corporate America as well as attitudes towards race and gender, but it can also retreat other areas of the DEI, such as accessibility for people with disabilities.
In addition to pros and cons, one important consideration related to the current debate is the motivation of the organization to engage in the DEI efforts. Christine Mooan, a professor of business administration at the Fuca School of Business at Duke University, suggests that there are at least seven different approaches (so-called mental models) behind decisions related to activism. For businesses with a “political mission view” approach, policy can be an important tool for generating global change, but those who take a more “computer view” approach are only taking an approach that should be engaged if it helps DEIs succeed.
The current political landscape ultimately tests the robustness of a particular DEI policy, revealing the motivations and values of the companies to become involved first.
Questions for discussion
Read more
“Crazy Ideology”: US companies remove diversity efforts as a conservative pressure mount
Dei Backlash: Employer restructuring won’t go backwards.”
US companies remove DEI from their annual report as Trump targets corporate value
When should the business be on?
Consider these questions
•Where do you stand in the DEI policy issues? To what extent should such personal values play a role in business decision-making?
• Check the numbers in this article. To what extent should the DEI strategy and engagement be shaped by the views of executives and employees regarding the preferences of external stakeholders, such as customers, suppliers, and shareholders?
•What are the most important criteria should an organization being scrutinized for DEI policies consider when considering whether to make changes?
•Read Christine Moorman’s commentary, “Brand Activities in the Political World” (2020) and apply the political activity “lens” outlined in Table 2 to the discussion. What conclusions do you draw when comparing companies like Costco? Are some mental models more risky than others? Why or why?
• Consider Deloitte’s recent case. To what extent should development in one region, such as the US, require global DEI policies and strategies? To what extent should a company’s value fit into a local context?
• Use tools provided by Greg Fisher, John Wysneski and Rene Backer in 3D textbook strategies to look at Costco’s perspective, diagnose current business situations and environments, determine how to advance your DEI strategy, and prepare and provide a rudimentary strategy implementation plan.
