The WSJ Editorial Board writes, more companies are backing away from DEI policies amid new public scrutiny
Our Take, With Doug Sheridan
The WSJ Editorial Board writes, more companies are backing away from DEI policies amid new public scrutiny, and the distiller Brown-Forman illustrates the trend. In an internal company email, the Brown-Forman Executive Leadership Team Wrote that since it launched its diversity initiatives in 2019 "the world has evolved, our business has changed, and the legal and external landscape has shifted dramatically, particularly within the United States."
Brown-Forman's email said it will end "quantitative workforce and supplier diversity ambitions," also known as race-based hiring, contracting and promotion. It will also end "participation in the Human Rights Campaign's Corporate Equality Index Survey."
The company added that it will be “reviewing training programs for consistency with an evolved strategy" and ensure that “executive incentives and employee goals are tied to business performance," a suggestion that perhaps they weren't closely linked before.
The Brown-Forman shift follows similar rollbacks at Harley-Davidson Motor Company, John Deere and Tractor Supply Company, which withdrew their major DEI initiatives this summer. Lowe's Companies, Inc.'s and Ford Motor Company announced similar changes this week and Ford Motor.
Companies are wise to re-examine their policies. CEOs and corporate boards are obliged by law to have neutral hiring practices that don't discriminate by race, gender and so on. Progressives have leaned on business to abandon this neutrality in favor of discriminating by race.
In that sense companies are doing themselves a favor by warding off potential lawsuits to come. They are also steering companies back to their fundamental mission to focus on increasing shareholder value, rather than politics.
The Supreme Court's 2023 Students for Fair Admissions v. Harvard ruling concerned unconstitutional discrimination in college admissions. But Justice Gorsuch wrote in a concurrence that discrimination in all federally funded programs is also banned under Title VI of the 1964 Civil Rights Act.
Gorsuch's interpretation almost certainly applies to Title VII, and companies run the risk of becoming test cases if they don't abandon the DEI framework. State Attorneys General began warning companies about this last year. If businesses weren't listening then, they are now.
Our Take 1: The walk back of the terribly misguided commitments to willfully discriminate against certain groups in favor of other groups is a welcome development. It's nutty it ever got this far in the first place.
Our Take 2: The job of righting this ship won't be complete until the Business Roundtable reverses its—quite honestly, craven—decision to replace shareholder value with stakeholder value as the stated primary focus of the corporation. At the time, it was plainly obvious that stakeholder capitalism was never going to be a workable framework. It's even more obvious now.