Investors at centre of culture wars

Remember when President Trump returned to the White House and ripped up all the US Federal Government diversity & inclusion programs on day one? The move fanned the flames of global corporate culture wars, and DEI – long accepted as regular good governance – became a battleground.  

Verve Super believes that DEI policies contribute to the equitable inclusion of women and gender-diverse people in society - and representation of diverse perspectives makes good business sense, too.  

As these culture wars escalate, companies around the are increasingly being approached by shareholder groups asking them to dial down or ditch their DEI policies. 2025 is turning out to be a pretty hot year for anti-DEI shareholder proposals. In fact, the number of shareholder proposals opposing environmental, social and governance (ESG) is on track to reach 150 this year, compared to 13 back in 2020. So far, around 80% of these take aim squarely at social and DEI topics. Equity is in the crosshairs.  

The good news is that most shareholders are rejecting these proposals. At big companies like Pfizer, Apple, Disney, Costco and Coca-Cola, a majority of shareholders have successfully blocked resolutions put forward by other shareholders to limit DEI efforts. Goldman Sachs shareholders recently voted with the board on anti-DEI proposals, defeating them by 98% to 2%. Typically, fewer than 5% shareholders support anti-DEI proposals, according to research by Harvard University. 

When investors buy stocks or shares, they’re buying a part of the company they’ve invested in. Now that they own part of the company, they also get some say in how it’s run. There are several ways they can try to influence company policies, such as engaging with a company directly, voting at Annual General Meetings, filing shareholder resolutions, campaigning, and threatening to divest. Over time, these actions can improve standards – taking corporations to task on things like modern slavery, environmental destruction, carbon emissions and working conditions. A good reputation can contribute to profitability, so it’s in investors’ interests to keep companies in line.  

But if one or two eligible shareholders don’t like a US company’s DEI policies, for example, they can put forward a proposal for all the other shareholders to vote on. If enough of them do, it sends a strong signal to the company to take action on their concerns..  

Many investors (including Verve Super!) use a global company called Institutional Shareholder Services (ISS) to manage proxy voting. How we vote helps tofurther our mission, giving us a platform to push for change.  

ISS has been dealing with increasingly conflicting demands from shareholders. It announced a policy shift for this year’s proxy voting season in line with Trump’s directives, saying it would no longer factor in gender or racial diversity when making vote recommendations for US company directors. However, it continues to support DEI transparency in alignment with shareholder values.  

In the US, companies now have to walk a fine line. On one hand, the new administration is taking a firm anti-DEI stance and pressuring or even demanding businesses abandon their commitments, and some investors have been emboldened by this stance, viewing DEI as unfair or unnecessary.  Many believe the misconception that non-minority groups are disadvantaged or left behind because of diversity-focused decisions. 

But despite the wave of anti-DEI sentiment sweeping corporate America (and beyond), most anti-DEI proposals end up being voted down by the other shareholders, because most investors do value DEI principles and their role in company performance, reputation and the bottom line.  

DEI is good for business and removing it also presents a legal risk from worker and civil rights groups. So when you add in a bunch of shareholders with conflicting views on the issue, it’s impossible to keep everybody happy.  

Some companies are responding by changing the terminology around DEI – sometimes even just tweaking the acronym. Others are reviewing or updating their policies to find an alternative approach to satisfy pro and anti-DEI shareholders, such as embedding it into business models without spotlighting it.  

Gender equality is a key element of DEI. Policies that level up equality of opportunity aim to ensure women have equitable opportunities in the workplace, society and education. Organisations with DEI policies seek to address issues such as the gender pay gap, to work around parenting and caring obligations for all genders, and to combat gender-based discrimination.  

Removing DEI policies means that companies no longer have a framework that considers gender diversity when hiring for leadership roles. Despite progress with gender equity, a US study in 2024 showed that 81 women are promoted into management roles for every 100 men, despite outnumbering men in the college-educated workforce. This is also despite the fact that gender and ethnic diversity on executive teams makes companies more likely to outperform their peers.  

A good-quality DEI program also protects women and gender-diverse people from workplace harassment, for example by awareness-raising, reporting channels and allyship initiatives. Rolling back these elements could put women and gender-diverse people at increased risk. 

Here at Verve Super, there’s no argument. DEI – or whatever you want to call it – supports pathways to gender equity. It puts more women in boardrooms, and it helps tackle the pay and super gaps between genders.  

Because Verve invests your money as shareholders, you also have a voice in this debate, and Verve will continue to advocate for issues that support equal opportunity for all genders.