Diversity, equity and inclusion (DEI) has been at the center of many conversations since 2023 - usually as a cautionary tale against rewarding incompetence or as apologia for poor internal practices served by token response. Undergirding both has been a theme of illegitimacy: that DEI hurt more than it helped. But what does the data actually tell us?
New research from UC Berkeley public policy scholar Jake Grumbach examines how major American companies performed after the Trump administration and others targeted DEI programs. The findings are clear: S&P 500 companies that maintained their DEI commitments benefited from the courage of their convictions. Not only did they not pay a financial price, across both stock performance and revenue, pro-DEI companies performed as well as or better than companies that retreated.
Data - hard, cold facts free of spin - defy the lie told in anti-DEI propaganda. Corporate America became convinced by headlines that the choice was a binary one: maintain commitments to building a broad workforce that respected difference or protect the bottom line.
This dynamic was and is a false choice, driven more by timorousness than conviction.
Institutions retreated despite reputable studies and internal observations. To be fair, some of them had never believed in the core sentiment that diversity meant considering the potential value-add of all people. That equity meant fair access to the opportunity to rise or fail or that inclusion reflected a corporate culture that respected belonging. Other companies, though, gave lip service to the constructs, but then leadership anticipated what might happen if they stood firm. The risk assessment tallied the value of pre-compliance. Which is how authoritarian pressure works. The threat itself becomes sufficient motivation to abandon principles rather than wait for evidence. Instead, institutions surrender power before anyone has actually taken it from them.
And every time a powerful institution obeys in advance, the next threat becomes more effective. In the rise of authoritarianism, these moments of confrontation do not arrive in cinematic arcs - they are the stuff of C-suite calculations, HR decisions and general counsel that risk avoidance is a virtue.
Risk is a vital consideration, but risk mitigation does not require capitulation. In fact, Grumbach’s research shows capitulation is pricey, and adherence to core beliefs can be more lucrative.. Those major companies that maintained their commitments despite political pressure or manufactured public outrage thrived, and the financial catastrophe DEI-deniers warned about failed to materialize.
The dangers of compliance without evidence extend beyond the cost of shunning DEI. It is the stuff that breaks democracy. Universities, law firms, media organizations, nonprofits and other institutions are facing the same fundamental question: make decisions based on values and the facts, or from fear of what those in power might do to the disobedient?
Compliance is a choice.
So is standing firm.
I spend much of my day challenging the ambitions of authoritarianism, instead championing the 10 steps it will take to preserve and improve democracy. One of the most important lessons of the DEI scare is that resisting intimidation may be far less costly than those issuing the threats want us to believe. Bravery isn’t risk-free, but cowardice can be expensive.
Read more in The Guardian
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