How Trump’s war on DEI is changing corporate culture

We’ve all said things we wish we could go back and unsay. Deloitte’s attempt to scrub from the internet a statement of its “core values” — now that diversity, equity and inclusion (DEI) is out of favour in Washington — might seem like an extreme example.

But it highlights the challenge faced by all large companies doing business in the US: to navigate a big shift in the political environment around these issues, without leaving staff wondering whether their employer actually has any “core values” worth taking seriously.

Are these companies showing necessary prudence, or an egregious lack of backbone? Let us know your views at moralmoneyreply@ft.com.

Diversity, equity and inclusion

A U-turn on corporate values

“At Deloitte, diversity, equity and inclusion are core to our values.” Well . . . they were.

That language was at the top of a page that has been deleted from the professional services firm’s website in a purge of DEI-related content, which can now be retrieved only through the superbly useful Wayback Machine.

This was part of a wider shift at Deloitte. Last week management told staff it was “sunsetting” its diversity goals in the US, as well as an annual DEI report.

Deloitte staff may be wondering what exactly their firm’s values are, if a supposedly core element of them can be abruptly disappeared like an out-of-favour Soviet official cropped from a photograph.

They’re not the only ones with cause to wonder. A host of other major companies, from McDonald’s to Target to Walmart, have made similar retreats over the past couple of months (albeit mostly without trying to destroy the digital evidence).

The proximate cause, of course, is the re-election of Donald Trump, who has made DEI a major target, not least in the flurry of executive orders that launched his second term.

The need to “comply” with these orders was cited by Accenture chief executive Julie Sweet as she announced the consulting firm was scrapping its DEI goals, which included increasing the proportion of women and ethnic minorities in its workforce. (Back in 2020, Sweet had asked in a co-authored report why businesses were not making faster progress on such matters, “when the business case in favor of a culture of equality strengthens each year”.)

In fact, Trump’s executive orders did not create new rules for Accenture and its peers to comply with. By ordering federal agencies to take an axe to DEI initiatives, however, they signalled that companies pitching for government contracts — a major business area for Accenture — might suffer from presenting themselves as DEI champions. (See also: Deloitte’s order that staff working on US federal contracts must remove gender pronouns from their email signatures.)

Separately, Trump has created new legal risks for companies, by ordering each federal agency to name nine entities that can be investigated for potentially illegal DEI practices. This has set companies scrambling to eliminate programmes aimed at supporting women or non-white staff, in case these are deemed illegally discriminatory against white men.

Aside from the direct risks presented by Trump’s administration, some companies are leery of losing conservative-leaning customers as the political opposition to DEI programmes heats up. Disney — which has faced complaints from activist investors that its DEI programmes could alienate consumers — is replacing the “diversity & inclusion” performance factor used to set executive compensation with a new “talent strategy”, according to an internal memo this week.

There’s also surely an extent to which senior executives — still, of course, disproportionately white men — are relieved to be able to ditch an agenda that they never liked in the first place. As one top banker put it to the FT last month: “We can say ‘retard’ and ‘pussy’ without the fear of getting cancelled . . . it’s a new dawn.”

Some companies are taking the opportunity to stand out from the crowd by reaffirming their commitment to promoting diversity. “We are now firmly behind this programme,” Deutsche Bank chief executive Christian Sewing said last month. “We can see how Deutsche Bank has benefited from it.” (The chief executive of Deutsche’s asset management subsidiary DWS sent out a similar message on LinkedIn, accompanied by a photo of himself holding a 60-kilogram dumbbell, for a reason that remains unclear.)

In the US, retailer Costco pushed back against an activist petition questioning its DEI programmes, and was backed by over 98 per cent of shareholder votes at its annual meeting last month. Apple has urged investors to reject a shareholder proposal that it scrap its DEI programmes, ahead of its annual meeting on February 25. (Both anti-DEI resolutions were filed by the National Center for Public Policy, a conservative think-tank.)

Other companies are taking a more nuanced approach (some readers might prefer a less flattering choice of adjective). At last month’s World Economic Forum in Davos, JPMorgan chief executive Jamie Dimon and David Solomon, his counterpart at rival bank Goldman Sachs, both stressed their continued belief that a commitment to diversity and inclusion makes sound business sense.

Since then, however, Goldman has dropped its policy of not working on public listings of companies with all-white-male boards. And at an employee meeting this month, Dimon suggested he’s poised to cut parts of JPMorgan’s DEI programme, according to a Bloomberg report based on a leaked recording. “I saw how we were spending money on some of this stupid shit, and it really pissed me off,” said Dimon. “I’m just gonna cancel them.”

Dimon’s rhetoric sounds like an effort to convey earthy authenticity while readying employees for a pragmatic shift in approach. But as chief executives race to adjust their public messaging to avoid censure from the Trump government, they need to think carefully about the impact on an audience that’s no less important: their staff. Employees of all stripes are likely to feel more motivated to work for a company that is honest and consistent about the principles that guide its work.

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