Treasurers and financial managers from 17 different states along with 60 investors urged America’s top corporations to ditch their “discriminatory” diversity, equity, and inclusion (DEI) agendas, warning that they could be in violation of both their fiduciary duties and open companies up to legal risk.
The two letters to Fortune 1,000 companies came after they were contacted by a coalition of Democrat politicians, who wrote to them in support of the leftwing DEI agenda and argued that DEI programs create “a culture of equality” that “allows your companies to remain competitive.”
Corporations throughout the country and across various industries have adopted blatantly discriminatory policies in the name of the DEI agenda. For example, white and Asian students were ineligible for an internship and scholarship opportunity with Oracle, while Apple hosted a program that similarly excluded whites and Asians because of their race, The Daily Wire found, leading Republican Attorney Generals to warn the tech giant it could be engaging in illegal discrimination.
The two letters also cite polling data from the Alliance Defending Freedom, which reveals that a plurality of the 3,000 employees polled, 40%, say that the DEI agenda divides colleagues rather than unites them.
“It is our considered judgment that DEI policies and practices threaten your company’s financial health, its reputation with customers, our nation’s economy, and the civil liberties of everyday Americans,” explains the letter from the state treasurers, who are “responsible for state investment vehicles that hold ownership positions” in the companies. “You have a fiduciary duty to your shareholders to avoid policies and practices that pose risk to firm performance. DEI programs are clearly such a risk.”
“The divisive and discriminatory ideology at the root of DEI has caused some of our country’s most prominent companies, like Home Depot, Lowes, Ford, and Toyota, to pull back on their DEI programs,” Jeremy Tedesco, Alliance Defending Freedom SVP of Corporate Engagement, said in a statement to The Daily Wire. “We should celebrate that and call on other companies to follow their lead. Sadly, some members of Congress have instead responded by urging companies to reaffirm their DEI commitments. Businesses should listen to their employees, customers, and shareholders, rather than politicians, and jettison DEI once and for all.”
The letters to the Fortune 1,000 companies from the 17 state treasurers also warn that companies that adopt DEI policies could run afoul of the law. DEI programs, the state treasurers say, “pose significant legal risk to corporations, especially after the U.S. Supreme Court struck down policies that relied on prospective students’ race to make college admissions decisions.”
“EEOC Commissioner Andrea Lucas and others have stated that this ruling calls into question many company’s DEI programs,” the letter explains, adding that “DEI programs are rooted in Ibram X. Kendi’s disturbing outlook that ‘the only remedy to past discrimination is present discrimination,’” a viewpoint that contradicts America’s laws.
The letter from investors, who collectively hold $60 billion in assets under management, asserts that DEI agendas are divisive and “label employees as ‘oppressed’ or ‘oppressors’ or say they have ‘unconscious bias’ based on the color of their skin, their biological sex, or their religious or political views.”
“DEI also punishes dissenting views under the guise of ‘privilege’ and ‘internalized’ racism, sexism, or other ‘isms,’” the letter from investors goes on to explain. “This replaces rich diversity of thought — the kind of diversity that builds trust and drives innovation — with a single, monolithic approach to workplace culture built on the notion that individuals are nothing more than their group identities.”
The investor letter also casts doubt on the legitimacy of studies from McKinsey Consulting, which assert that increased workforce diversity results in increased profitability. The debunked studies have been used to justify the DEI agenda in both corporations and the armed forces alike.
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“The neutral Econ Journal Watch has called into serious question the long-touted assertion that DEI programs provide a financial benefit for companies and shareholders. Using McKinsey’s own data, the researchers found the analysis to be ‘erroneous’ and not statistically significant, so much so that they concluded that McKinsey’s studies ‘should not be relied on,’” the investor letter stated.
Arizona Treasurer Kimberly Yee, who signed onto the letter, said state financial officers should focus on financial “performance” over “trending social issues.”
“As state financial officers, we have a fiduciary responsibility to the taxpayers to invest in companies that prioritize their financial health and performance, not trending social issues such as DEI programs,” Yee said. “When progressive members of Congress try to force corporations to adopt radical, red-tape policies such as DEI programs, they infringe on the free enterprise system upon which our United States was founded.”
Others who signed the letter included state financial officials in Alaska, Arkansas, Idaho, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, and Utah.
