In recent months, one major company after another has rolled back its DE&I commitments: Walmart, Meta, Lowe’s, McDonald’s, Target, Deloitte. The trend began even before the second Trump administration released executive orders taking aim at DE&I, but the implied consequences of such orders has led other companies to wonder whether they should follow suit.
Speaking at GreenBiz 25, an event for sustainable business leaders, attorney Alphonso David, president and CEO of the Global Black Economic Forum, and consultants Eloiza Domingo and Tynesia Boyea-Robinson, offered advice on what steps companies should take next.
What the EO says. Executive Order 14173 is perhaps the one that most companies will be concerned with. It prevents federal contractors from “engag[ing] in workforce balancing” based on gender, race, and other identity attributes, and requires agency heads to affirm that contract and grant recipients do not “operate any programs promoting DEI that violate any applicable federal anti-discrimination laws.”
But the EO has ramifications for companies that aren’t federal contractors, too. It instructs federal agency heads to compile a report on “measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” The report will identify “key sectors of concern within each agency’s jurisdiction” and “the most egregious and discriminatory DEI practitioners in each sector of concern.”
Each agency is asked to identify “up to nine” public companies, large nonprofits, associations, or institutions of higher education as targets of “potential civil compliance investigations.” Organizations have filed suit over the orders.
Know your risk tolerance around DE&I: Companies need to have discussions about the status of their DE&I policies, if they haven’t already, according to Domingo, founder and CEO of consulting firm FourTen, which advises companies on crisis management. One reason many are now scrambling is that they “haven’t had proactive conversations about how to mitigate the risk” of events that might require changes to their policies, she said. (She saw something similar happen during the Black Lives Matter movement, when companies were caught off guard and didn’t know how to react.)
Boyea-Robinson, founder and CEO of CapEQ, suggested framing the conversation in terms of risk. “Every decision has risks [that] fit into it, and it’s about trading off and understanding what is our company’s risk tolerance, what aligns with our vision, what aligns with our values, what aligns with our mission,” she said. Consider the financial and legal risks of retaining your DE&I policies, Domingo said. If you get government funding, for instance, you might decide the risk’s too great.
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But don’t neglect reputational risk, Domingo added. There are other cultural forces at work beyond the White House. “The rhetoric about this overwhelming ground force is demanding you stop doing DEI” is exaggerated, Boyea-Robinson said, observing that less than 2% of anti-DE&I shareholder resolutions pass.
And recall that ending DE&I programs or policies could introduce you to risk, David, former counsel to the governor of New York, said. “When you eliminate DEI programs, you open yourself up for a potential lawsuit” over civil rights issues, he said, noting that DE&I first emerged in the wake of civil rights legislation. (Organizations first adopted DE&I, he noted, as a defense against claims of discrimination.)
Be able to make the business case for DE&I: As a private company you have “a right to do business, to meet the needs of your shareholders and stakeholders,” Boyea-Robinson said. You can make a strong case for upholding your DE&I programs if you determine that they help you meet those needs, panelists said. For instance, Boyea-Robinson asked, does having a workforce that reflects your consumer base better position you to develop products and services that will sell? In that situation, preserving DE&I is “your right as a company,” she said.
Domingo gave other examples from her time as deputy chief diversity officer for Johns Hopkins Medicine: Patients have better health outcomes, she said, when they’re treated by medical professionals of the same demographics. Therefore, having a diverse workforce might be a business imperative for a medical organization.
Ultimately, Domingo said, having conversations about the EOs could prove “an opportunity for us as leaders to reevaluate the values of our institution[s]” and “to defend or define who it is that we are.”