Corporate America — why so shy about DEI?

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After the police killing of George Floyd in 2020, corporate America undertook a collective virtue signaling. Many of the companies that were already making efforts to improve diversity, equity and inclusion rushed to promote it, and those that weren’t quickly launched initiatives — a signal that they, too, were doing their part to fight racial inequality.

Nearly four years later, an almost complete reversal has taken place. Nearly 60% of Fortune 500 companies now have a chief inclusion and diversity officer, and about half of the S&P 100 have publicly stated diversity goals. But good luck getting them to talk about it.

Businesses have plenty of reasons to keep quiet. The Supreme Court’s June decision reversing affirmative action at colleges and universities has had a chilling effect, with companies closely monitoring how the ruling could open them up to legal action for their own hiring practices. A cohort of Republican politicians — led by Gov. Ron DeSantis of Florida and his attacks on Walt Disney Co. — have decided to make their war on “woke capitalism” central to their platform. On the proxy front, investors are filing shareholder proposals meant to undermine companies’ diversity efforts. Activist investor Bill Ackman’s successful campaign to oust Harvard University President Claudine Gay and his attacks on the university’s DEI practices have many expecting he’ll turn his attention to corporate America next. Elon Musk, who can never seem to stay away from the party, has also chimed in, sending out a barrage of tweets attacking DEI.

Amid the heightened scrutiny and blowback from the right, some companies have indeed retreated from their DEI investments. Chief diversity officers, for example, have been targeted in the latest round of corporate layoffs. But the numbers so far indicate that most companies, to their credit, seem to be sticking by their DEI programs. A recent report from labor and employment law firm Littler found that the majority of the companies represented in its survey expanded their DEI initiatives over the past year despite saying that the backlash had increased since the Supreme Court’s decision.

But the inclination among corporate America to advertise its DEI work has evaporated as legal departments, law firms and communications teams advise companies to say less. As Fortune has reported, not a single session this year at the World Economic Forum in Davos, Switzerland, includes the acronyms DEI or ESG (environmental, social and governance efforts have also become a target of the so-called anti-woke mob). Mentions of diversity, equity and inclusion on earnings calls and at conferences has fallen drastically, according to a Bloomberg News analysis; in the third quarter of 2023, the acronym’s use fell to its lowest level since 2018.

The impulse here is understandable. Why make yourself a target if you don’t have to? Isn’t all that matters that the work gets done? In fact, I’ve argued here before that less grandstanding and more substantive action is never a bad thing.

And yet this is case where words do matter. Refusing to talk about DEI or renaming it altogether comes across like an admission of guilt, that what a company is doing is wrong and needs to happen quietly in the shadows. It provides more fodder for and fails to counter those opposed to DEI, who have been perpetuating a false narrative about what it means, either out of a base misunderstanding or to intentionally obfuscate.

But companies remain committed to their DEI efforts because they work — they help attract and retain talent, they help get the most out of employees, they create a workforce that reflects the population that companies serve. Corporate America needs to say that, and yet the collective virtue signaling has been replaced by a collective clamming up.

One of the few prominent voices advocating for DEI right now is Mark Cuban, who posted a thoughtful thread on X in the aftermath of Gay’s departure from Harvard. In doing so, he’s made himself a target of the vocal anti-DEI contingent. But rather than back away, he’s continued to forcefully engage with his critics, just as Ackman and Musk have done. Corporate America should take notice. This might be one of those rare occasions where talking is as important as doing.