A recent New York Times story highlights a crisis that companies have been struggling with over the past months: the backlash against their diversity, equity and inclusion, or DEI, initiatives. The Times story drives home that much of this crisis involves communication.

Companies began implementing these policies especially after the 2020 murder of George Floyd, a Black man, by police, which led to Black Lives Matter protests and calls for increased minority opportunities.

Many argue that diversity helps financial performance, but that’s a controversial notion, and the research is unclear. “A series of McKinsey & Co. studies between 2015 and 2020 found a statistically significant correlation between public company earnings and the racial diversity of their executives, but more recent research has questioned the durability and magnitude of those findings,” Bloomberg reported in August (“What Is DEI and Why Is It Under Attack?”).

Conservative groups say the initiatives harm white workers. Companies that pulled back on their DEI efforts in response to the backlash include Tractor Supply, John Deere, Harley-Davidson, Lowe’s and Ford Motor Co.

Stock Prices

The focus of the Times’ Oct. 26 DealBook piece is that advising companies on these issues is becoming a business for Wall Street law and communications firms, as the criticism is affecting stock prices. There was also the high-profile boycott, which hurt sales, of Anheuser-Busch InBev’s Bud Light for featuring transgender influencer Dylan Mulvaney in an ad.

On the other hand, companies can face backlash for making empty promises about DEI initiatives and failing to follow through.

One aspect of preparing for an attack — as in crisis preparedness in general — involves investigating where companies might be vulnerable to attracting backlash in the form of protests or boycotts. These areas include having hiring quotas, shaming people as the “bad guys” in training and engaging in tokenism, such as promoting people only on the basis of diversity, according to a Forbes article. Another red flag (alas), according to the Times, is associating with the Human Rights Campaign, an L.G.B.T.Q. advocacy group.

Language Change

Many companies aren’t necessarily changing their policies but the language they use to describe them, according to the Times. This strikes us as tricky, but it’s clear these businesses find themselves in a tough place, with advocates on both sides.

The language issue even gets down to letters. A Conference Board study found that companies are altering how they describe their DEI efforts by de-emphasizing racial diversity and removing the “E” because it’s seen as the most controversial, according to an Oct. 28 Bloomberg piece (“Companies Are Dropping the D or E From DEI to Avoid Criticism”). In July, the Society for Human Resources Management dropped the “E” from its own diversity program, now called “I&D,” to emphasize inclusion.

Of course, the backlash has engendered a backlash. After all, there are those, including investors such as pension funds, that strongly support DEI. In September the Human Rights Campaign, NAACP, the National Organization for Women and 17 other groups wrote a letter to Fortune 1000 chief executives encouraging them not to pull back on their DEI efforts.

Image credit: Esa fadiat/Shutterstock

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