Faced with backlash, some business leaders are going ‘under the radar’ with DEI

Over the past two years, as Ishan Bhabha and his colleagues at the law firm Jenner & Block prepared briefs for the affirmative action case that the Supreme Court ruled on last year, Mr. Bhabha realized: If higher education institutions like Harvard were the first targets for diversity, equity and inclusion litigation, corporate America’s boardrooms were likely next.

Mr. Bhabha began working with dozens of Fortune 500 companies to evaluate their diversity programs and ensure they had solid legal foundations if successful.

Proponents of corporate diversity, equity and inclusion programs, commonly known as DEI, argue that they are important for hiring and retaining people of color. Critics now argue that some of these programs may unfairly exclude white and Asian people from hiring processes.

In recent months, hundreds of companies have reexamined these initiatives after a series of challenges to diversity programs: the threat of litigation following the Supreme Court’s decision overturning race-conscious college admissions, criticism from DEI initiatives from some senior leaders. -high profile business leaders, and a wave of layoffs in the technology industry which has strongly affected DEI teams.

This pushback — which occurred as more than 20 states considered or passed new laws last year targeting DEI initiatives — has had a chilling effect on some corporate DEI offices, according to various advisers.

“When the economy is booming and when policy is supportive, we see a lot of growth in diversity programs,” said Frank Dobbin, a DEI expert at Harvard and author of the 2022 book “Getting to Diversity.” “When there is either a change in political winds – which is happening now – or a recession, we have seen reductions. »

According to Dr. Dobbin, the backlash has caused some HR professionals to keep their DEI efforts “under the radar.” At recent conferences he has attended, Dr. Dobbin added, business leaders have discussed how to approach DEI “in a less direct way.”

Some have considered moving away from initiatives that attract a lot of public attention, like mandatory anti-bias trainings, and instead focus on quieter DEI strategies, like diversity task forces that bring together senior leaders from different departments of the company.

“If companies focus on the things that are ineffective, that could be a good outcome,” Dr. Dobbin said, noting that mandatory anti-bias training has been shown to sometimes even make bias worse. “But I’m afraid the baby will come out with the bath water.”

So far, few companies appear to have scaled back their programs due to the Supreme Court’s decision. Three-quarters of employers surveyed by Littler Mendelson PC, the employment law firm, said they had not changed their approach to DEI because of last year’s ruling, and only 1 said Hundred reported a significant decrease in their efforts, according to a survey released this year. month.

And some leaders say they’re doubling down, like Crystal Castille-Cromedy, who leads DEI strategy for Hines, one of the world’s largest real estate companies. Ms. Castille-Cromedy joined the firm in June 2020, days after the killing of George Floyd, and has overseen a number of diverse efforts, including the creation of a mentoring program for underrepresented groups in the real estate.

Mr. Bhabha, a partner at Jenner & Block and chair of the firm’s DEI Protection Task Force, said he had “some clients who were saying, ‘Look, if I was done with this and I had to becoming the face of DEI’s defense against a conservative backlash, I would be happy to do so. » But, he said: “The vast majority of my clients do not fall into this category. They think: “We would like to keep our heads under the parapet. »

The American Alliance for Equal Rights, a conservative nonprofit organization dedicated to challenging race-based policies, last year sued a handful of law firms over their programs. diversity scholarships, arguing that these programs discriminated against white and Asian applicants.

American Alliance founder Edward Blum also created Students for Fair Admissions, the group that sued Harvard over its affirmative action policy and won.

“These lawsuits sent a powerful message to corporate America that the law firms you turn to for legal advice regarding DEI are themselves violating the law,” Mr. Blum said.

American Alliance filed lawsuits against law firms Perkins Coie, Morrison Foerster and Winston & Strawn. These companies have all since opened their various exchanges to applicants of all races and backgrounds, and Mr. Blum’s group dropped the lawsuits.

“Following the Supreme Court’s historic decision overturning racial affirmative action in college admissions, we have undertaken a comprehensive review of our programs,” Winston & Strawn said in a statement. Perkins Coie said in its statement that the program’s revised criteria would continue to “ensure” that the firm recruits attorneys “with a diversity of backgrounds and experiences.”

Morrison Foerster said he was opening the stock market even before the trial.

Besides the threat of litigation, some high-profile company executives have recently criticized diversity programs. Billionaire financier Bill Ackman wrote a essay this month in The Free Press, after Claudine Gay resigned as Harvard president, denouncing what he called “the penetration of DEI ideology into the corporate boardroom “. Elon Musk, posting on X, wrote: “Discrimination based on race, as the DEI does, is literally the definition of racism. » (Billionaire investor Mark Cuban, meanwhile, wrote onDEI-phobic companies’ loss is my gain. “)

Executives who have criticized certain types of diversity programs within the industry say broad critiques of DEI can be counterproductive, distracting from meaningful efforts to reform corporate diversity initiatives.

“I’ve been critical of things like our relative lack of metrics, the relative lack of accountability, the fact that leaders can issue a DEI statement and do nothing else,” said Lily Zheng, DEI strategist and author of “Reconstructing DEI “Mx. . Zheng sees criticism of racial quotas as focusing on ‘DEI straw man’

In 2020, after a wave of protests for racial justice following the killing of George Floyd, corporate DEI programs saw an influx of support and hundreds of employers came forward to announce new DEI initiatives. diversity. That year alone, businesses spent approximately $7.5 billion on DEI-related efforts. But some DEI leaders say attention and investment haven’t been sustained since then.

“It’s a sugar rush phenomenon,” said John Amaechi, a retired basketball player who now works with companies on DEI strategy. “This creates a huge amount of energy followed by withdrawal.”

In some cases, DEI programs have been hit hard by job cuts. RévélioLabsa workforce database, released a study last year of 600 companies that have laid off workers since 2020 and found that the attrition rate for people working in DEI was nearly two times higher than employees in non-DEI positions.

Many executives still say their efforts to recruit diverse employees contribute to company performance. For example, Armughan Ahmad, chief executive of Appen, an artificial intelligence company, says a diverse talent pool allows the company to create products trained for diverse users, helping prevent racial bias in AI algorithms.

Armughan Ahmad says having a more diverse workforce helps his artificial intelligence company Appen create products tailored to diverse users.Credit…Business Feed

Many business leaders share this view.

“Even in places where anti-DEI legislation is passed, it’s not about emphasizing that companies don’t have to do this work,” said Jensen Harris, co-founder of Textio, a resources platform AI-based humans. by more than 1,000 companies. “They’re the ones who are wondering, ‘OK, DEI’s work is still very important, so how can we get around this legislation?’ »

The Supreme Court’s recent ruling on race-conscious admissions policies does not directly apply to most employers. The ruling focused largely on Title VI of the Civil Rights Act of 1964, which covers institutions receiving federal funding and does not apply to most private businesses. But many employers fear their DEI initiatives could be legally challenged under Title VII, which deals with labor relations, or Section 1981 of the Civil Rights Act of 1866, which covers contracts.

Kenji Yoshino, director of the Meltzer Center for Diversity, Inclusion and Belonging at NYU School of Law, advised executives at Fortune 500 companies to code their DEI programs green, yellow or red. A red program indicates an initiative that has a high risk of potential litigation, such as a hiring process that provides an advantage to applicants of color; On the other hand, a program that provides large-scale mentoring to everyone in the company can be classified as green.

Mr. Yoshino noted that some critics of DEI have a limited view of the nature of the programs. Many corporate diversity programs go beyond hiring processes to mentoring, training and career development.

“The pessimists say, ‘This is a terrible time for DEI, DEI is over, the sky is falling,'” Mr. Yoshino said. “I want to ask people what they really think about DEI.”