Add These DEI Objectives To Your Board’s Agenda To Avoid Reputational Risks

Regulatory bodies like the UK’s Financial Conduct Authority, Nasdaq, and the European Union are enforcing DEI-related disclosure requirements for board diversity and equity practices in the face of litigation, investigations, and complaints. An article jointly written by White & Case and the Financial Times discusses the need to add five DEI objectives to your board’s agenda to ensure protection from legal and reputational risks.

In the United States, regulatory and shareholder pressures have spurred lawsuits and civil rights complaints targeting corporate DEI efforts. The U.S. Supreme Court’s ruling on affirmative action has emboldened these efforts, raising concerns that corporate DEI initiatives might face similar legal challenges. Additionally, anti-ESG forces have targeted DEI, increasing litigation, state investigations, and shareholder activism.

To mitigate these risks, the article suggests including these DEI objectives to your board:

• Strategically assess the organization’s DEI goals and the challenges in meeting them.
• Include goals and challenges in DEI policies to eliminate the risk of DEI-washing allegations.
• Ensure robust data collection as required by legal frameworks.
• Pre-empt the filing of resolutions by engaging with activist investors.
• Develop a DEI road map to mitigate the risk of whistleblowing, grievance filing, or consumer boycotts.

Focusing on these DEI objectives can demonstrate progress and accountability, and your company can protect itself from legal and reputational risks while advancing DEI outcomes.