Diversity Officers Chart New Course Amid Political, Legal Storms

Kwasi Mitchell and Shane Lloyd are both perched on one of the hottest seats in the C-suite.

As top diversity officers at Deloitte and Baker Tilly, respectively, the two are leading diversity, equity and inclusion efforts at a time of upheaval with some DEI officers leaving their posts and a shrinking commitment to diversity initiatives in some companies. Legal and political threats against diversity policies in corporate America also loom.

While the Supreme Court’s June decision ending affirmative action in college admissions and the recent political backlash against DEI programs have drawn some concerns of a chill in the industry, diversity chiefs interviewed by Bloomberg Law are embracing this as a moment: Not just to emphasize the importance of their role in recruiting and retaining workers, but also to carve new niches.

“I think that there is a refinement of our messaging that needs to expand to other aspects beyond race and sex per se,” said Mitchell, speaking about how DEI teams across industries can broaden their efforts.

Expanding diversity messaging to focus on social economics, for example, will help achieve broader DEI goals, Mitchell said. More broadly, DEI efforts remain a priority for a range of companies, diversity leaders said.

“The evolution that I’ve seen is DE&I is continuing to take up a substantially larger portion of the time within the C-suite,” Mitchell said.

There’s data to back that up: Nearly 75% of companies with DEI programs plan to build and enhance them, according to a new survey of 400 executives and human resources leaders at large companies.

The study, conducted by executive headhunting firm Bridge Partners from July 25 to August 10, showed that almost 90% of companies still see their DEI programs as necessary. Companies that designed DEI initiatives to be long-lasting signaled commitment, partner and co-founder Tory Clarke said.

“Why they’re unfazed is that they’re in it for the long haul,” she said. “They entered this space with the intent of a long-term investment and a long-term return on investment.”

‘The Moment’

The police murder of George Floyd in May 2020 galvanized a social justice movement and along with it, the rapid growth of corporate DEI programs. Any company that didn’t have a DEI team suddenly built one, and those that had teams in place beefed them up.

Some diversity programs were intended to be long-lasting, while others were more “performative,” Clarke said.

Companies that initiated DEI programs during this time perhaps did so too quickly, said Lisa Toppin, former chief diversity officer of biotech giant Illumina. Toppin is temporarily consulting while looking for another chief diversity officer role.

“We, of course, had the moment with George Floyd: Everybody rushed in in ways that they couldn’t fully absorb,” she said. “There’s a little bit of letting back out, or pushing away from the table for a minute.”

A February report from HR database Revelio Labs said that DEI roles are diminishing at a faster pace than non-DEI roles, a trend that the report says started in 2021 and continued into 2022.

Just this year, there’s been a string of reported layoffs in DEI departments. There were also recent announcements at companies including Disney, Netflix and Warner Bros. Discovery that their DEI executives were leaving their positions.

Some companies have reeled in their diversity commitments and, in some cases shed almost their entire DEI teams. Bloomberg News reported, for example, that Twitter, now known as X, cut its DEI team from 30 employees to just two people in January.

But that doesn’t mean DEI in corporate America is weakening, Baker Tilly’s Lloyd said. Each exit has marked a unique circumstance. In the case of Netflix, Vernā Myers, who announced her departure in June, had worked at the company for five years before pursuing her own DEI consulting business.

“When we think of the fact that many DEI leaders are serving in their roles for less than two years, the fact that she had a five-year tenure is unique and impactful,” Lloyd said.

It’s important for diversity teams to focus on telling stories about how such programs can help promote all people within organizations, Deloitte’s Mitchell said.

“I do think that the conversation associated with resources and the demise of the chief DE&I officer is vastly overstated,” he said.

Lawsuits Everywhere

When the Supreme Court rejected affirmative action efforts at Harvard University and the University of North Carolina—ruling that the consideration of race in their admissions process is illegal—concern flared up that there would be repercussions for corporate DEI programs, too.

Soon after, Republican attorneys general sent letters to Fortune 100 companies including Apple and Amazon warning that they could take legal action over corporate race-based quotas. Law firm diversity fellowships have also faced legal challenges from conservative activist Edward Blum.

In addition to lawsuits, nine explicitly anti-ESG shareholder proposals went to a vote at company annual meetings in the first half of this year, according to think tank The Conference Board. While none passed, their introduction shows that efforts to undermine ESG—and sometimes, DEI initiatives—are growing.

Meanwhile, a slew of advocacy groups, shareholders and employees are calling companies out for not doing enough on diversity. Lawsuits against Wells Fargo, Delta Airlines and Danaher Corp. filed in the last few years all alleged the companies didn’t live up to their stated DEI goals.

Employers aren’t going to abandon diversity, equity, inclusion and accessibility (DEIA) because of the political backlash and legal threats following the Supreme Court decision, said Joanna Colosimo, vice president of workforce equity and compliance strategy at DCI Consulting, during a webinar on September 13. Companies will need to take a step back and do a self-assessment to make sure that their initiatives comply with current law, however, Colosimo said.

“This is a really important time if you’re a DEIA professional—this is our time,” she said. “We shouldn’t shy away or lean away from DEIA initiatives. We should actually lean in, and lean in harder in making sure that they are truly initiatives that are open for everyone and we’re within the bounds of the law.”

What’s Next

The political backlash over DEI has been simmering among conservatives for some time. It has been growing louder lately, hitting a boiling point during the first Republican presidential primary debate.

“Reverse racism is racism,” entrepreneur and GOP presidential candidate Vivek Ramaswamy declared onstage last month.

But it’s been more than just a campaign talking point: Florida Gov. Ron DeSantis, another Republican presidential candidate, signed a bill in May banning Florida’s public colleges and universities from using state or federal funds on DEI programs.

Yet against the political headwinds, companies, consumers and employees are still overwhelmingly pushing for more to be done on DEI. Generation Z, born between 1996 and 2012, is more far more diverse than any other generation, former Illumina diversity chief Toppin said, and demands robust diversity initiatives to foster a sense of belonging at work.

“It’s not going away—it can’t go away, because Gen Z is coming into the workforce in full force,” Toppin said. “Half of them are not Caucasian, and half of them have the expectation that they’re going to see themselves in their experience, in their employment.”