Costco Stands Firm on Diversity Policies

Costco shareholders recently voted to keep the company's diversity, equity, and inclusion (DEI) policies intact. This move comes amidst a wave of companies scaling back their DEI efforts, often citing legal concerns. The National Center for Public Policy Research, a conservative think tank, proposed that Costco evaluate the risks of its DEI practices, but over 98% of shareholders rejected this idea. Costco's board believes these policies foster innovation and customer satisfaction. They argued that a report on the risks wouldn't provide meaningful information. Neil Saunders, a retail expert, notes that Costco's strong performance gives shareholders confidence in its management. This differs from other big brands like Walmart and McDonald's, which have scaled back their DEI initiatives. Some prominent tech companies, like Amazon and Meta, have also rolled back their DEI programs. Conservative groups, emboldened by a recent Supreme Court decision on affirmative action, have been targeting corporate DEI initiatives with lawsuits. Former President Trump signed an executive order to terminate these programs within federal agencies. The order also targets private companies with practices deemed discriminatory against non-minority groups. Costco has a chief diversity officer, but its executive ranks aren't as diverse as its customer base. About 81% of Costco's executives were white, and 72% were men. The National Center for Public Policy Research alleged that a significant portion of Costco's employees could be victims of illegal discrimination due to their race, gender, or sexual orientation. Costco differs from other corporations in that it doesn't have a public relations team and hasn't prioritized online business as much as rivals like Walmart and Target. The company's consistent financial performance leads to long tenures for its management team. Looking ahead, the National Center for Public Policy Research plans to present a proposal at Apple's shareholder meeting, asking the tech giant to abolish its DEI department and policies. Apple's board wants shareholders to vote down this proposal. JPMorgan CEO Jamie Dimon recently defended his bank's DEI policies, saying they would continue to reach out to various communities. Trump's actions increase legal risks for companies resisting the conservative backlash against DEI. However, many big companies have likely consulted with lawyers post the Supreme Court's affirmative action ruling.