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UPS, Coke and Home Depot shareholders try to force DEI changes

Mirtha Donastorg, The Atlanta Journal-Constitution on

Published in Business News

As diversity programs in corporate America face increasing legal challenges, shareholders of three publicly traded Atlanta corporations have demanded changes around diversity, equity and inclusion initiatives.

The moves come after a U.S. Supreme Court ruling in June 2023 effectively ended race-conscious college admissions programs. Nearly 60% of C-suite executives surveyed by employment law firm Littler said backlash to corporate diversity programs has increased since that ruling.

Recent court cases in Tennessee and Texas have forced changes to federal business diversity programs, and a high-profile racial discrimination case involving local Black-owned venture firm Fearless Fund is still winding its way through the courts.

Risks around DEI?

Shareholder proposals are one of the ways investors in a publicly traded company can push for change.

One of Coca-Cola’s shareholders, the National Center for Public Policy Research (NCPPR) — a D.C.-based conservative think tank — asked the board to commission and publish a report detailing whether the company engaged in any diversity, equity and inclusion (DEI) practices “that may create risks of discriminating against individuals who might sue the Company … for illegal discrimination on the basis of protected categories like race and sex” and potential costs to the business of such discrimination.

 

“Our central goal is to get corporations to get out of high-risk, low-reward activities that aren’t directly connected to their to their fundamental business purpose,” Scott Shepard, director of the Free Enterprise Project (FEP) and general counsel at the NCPPR, told The Atlanta Journal-Constitution. The FEP opposes “the woke takeover of American corporate life,” according to the project’s website.

The NCPPR sees DEI initiatives as a form of discrimination based on race, sex or orientation, that may exclude men, white people or straight employees. After nearly 200 years of slavery and segregation, the Civil Rights Act of 1964 officially outlawed employment discrimination based on race, color, religion, sex or national origin.

Shepard said Coca-Cola was violating its fiduciary duty by not exploring the legal risks of equity programs.

But fellow investors did not agree. The proposal received just 1.57% of votes cast at the May 1 annual meeting of shareholders.

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©2024 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.

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