FIGURE 1 Shareholder proposals continue to rise in 2024 Shareholder proposals, 2021-2024 (Russell 3000)
2021 1015 881 798 593 648 662 483 143 Filed Source: The Conference Board/ESGAUGE, 2025 Voted 80 82 Omitted 146 171 208 178 204 Withdrawn 912 2022 2023 2024
DEI Policy Changes On December 11, 2024, the 5th Circuit Court of Appeals rejected Nasdaq’s rule requiring its listed companies to have at least one woman, racial minority, or LGBTQ person on their board, or explain the lack of such representation. Tis rule was challenged and found to be violating federal securities law. Just over a month later, on January 20, 2025,
Inauguration Day, an executive order (EO) entitled, “Ending Radical And Wasteful Government DEI Programs and Preferencing,” was issued by the White House. Te EO aimed to terminate all DEI programs, mandates, and policies within the federal government and revoke previous criteria mandating affirmative action in federal contracting. In a factsheet produced by the White House on
January 22, 2025, the administration further explained its actions related to diversity, noting that “radical DEI has dangerously tainted many of our critical businesses and influential institutions, including the federal government.” In response, private companies and public agen-
cies began rapidly pulling back on their DEI initiatives. Disney told employees it will replace its “Diversity and Inclusion” performance factor to evaluate ex- ecutive compensation and rebranded its employee resource groups. Google ended its goal to increase the number of
professionals employed from historically underrep- resented groups and is reviewing its diversity efforts.
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McDonald’s wrote to its franchise owners, noting it conducted a civil rights audit and, as a result, will end its aspirational representation goals. Meta, citing the current legal and policy landscape, cut its DEI team and ended its “Diverse Slate Approach” to hiring. Walmart, the largest employer in the United States,
is phasing out the description “diversity, equity, and inclusion” across its materials and stopped partici- pating in human rights surveys.
Buy Side and Proxy Advisor Actions Institutional investment firms have also taken action. BlackRock replaced its 30% board diversity target with broader expectations on diversity. Similarly, Vanguard removed minimum target requirements related to gender, race, and ethnicity on boards of directors. State Street previously mandated at least 30% female representation on boards and required S&P 500 companies to include at least one racial or ethnic minority member in their director slate. State Street now prefers boards to encompass diverse backgrounds, experiences, and perspectives, rather than specify precise diversity targets. With such a rapid shift in policies by publicly
traded companies, proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis had to rethink their approaches to diversity this proxy season. On February 11, ISS issued its “Statement Regard-
ing Consideration of Diversity Factors in U.S. Director Elections.” Recognizing the changing landscape, ISS
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