Shareholders in Apple have rejected a motion put to their annual general meeting to scrap the company’s diversity, equity and inclusion (DEI) initiatives. It was proposed by the National Center for Public Policy Research, a conservative non-profit group.
Similar battles are expected to play out over the coming weeks as large US companies hold their annual shareholder meetings. Whatever the outcome of the votes. it is clear that corporate America is backing away from DEI initiatives in the wake of Donald Trump’s election victory.
US companies are under no legal obligation to drop these policies as long as they are in line with federal anti-discrimination statutes. But many are wary of falling foul of the new administration which has abolished federal government DEI programmes and mandated federal bodies to investigate “illegal” DEI programmes and effectively boycott companies following them. Several US multinational have already run up the white flag and scaled back their DEI efforts, including Goldman Sachs, Citigroup, Disney and Pepsi.
US multinationals will still be obliged to comply with their diversity obligations under EU law if they operate in Ireland or elsewhere in the Union; in Europe, DEI generally refers to diversity, equality and inclusion. This is good news for Irish and other European workers. These rules include the EU Pay Transparency Directive which can require companies to take action to close a gender pay gap. Similarly, the Corporate Sustainability Reporting Directive obliges companies to publish key information.
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Meeting EU and other national obligations will potentially create problems for US multinationals operating in the EU and vice versa. In both cases companies run the risk of breaking US law by adhering to European laws and directives on diversity. Much will hinge on how federal agencies in question interpret the presidential orders.
What is happening in the US will have a chilling effect on DEI policies at the multinationals that have hitherto shown leadership in this area. Nonetheless, EU governments need to stay the course and hope that big companies see the value of DEI policies in attracting and retaining staff.
