legal scrutiny and shareholder expectations. Craft clear and consistent messages to reflect the company’s values and strategic priorities, emphasizing the business benefits of DEI to address stakeholders’ concerns, while avoiding potential legal pitfalls. Utilize data analytics to measure the impact of DEI initiatives on business performance and identify key metrics that demonstrate the positive effects of diversity on innovation, employee engagement, and financial outcomes, underscoring that talent and culture remain core priorities, even as specific programs evolve. If adjustments to DEI commitments are necessary, ensure that messaging is framed around business performance, innovation, and risk management rather than political ideology. Transparency and clarity are crucial. By maintaining transparency and consistency in their communications, companies can help preserve trust with investors and stakeholders.


• Highlight Positive Benefits through a Proactive Engagement. Despite the challenges posed by the anti-DEI movement, there is a compelling case for the long-term value creation potential of inclusive practices. Proactively engage with shareholders and activists to address concerns and highlight the strategic importance of DEI, while monitoring stock movement. Research consistently shows that diverse teams drive innovation and improve financial performance, making DEI a strategic advantage. Address DEI initiatives proactively and align them with corporate goals to foster a collaborative environment and mitigate potential conflicts by addressing issues head-on. Work closely with legal, compliance, and public affairs teams to assess the implications of policy shifts and develop clear, defensible rationales for any changes in DEI commitments to avoid reputational and legal exposure.


• Communicate that legal compliance does not negate inclusion. Ensure all DEI-related disclosures and communications comply with evolving legal standards and regulations. Tis involves working closely with legal teams to navigate the shifting regulatory landscape and avoid legal risks. Compliance will help protect


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the company from lawsuits and regulatory penalties while maintaining investor confidence. If DEI commitments need to be modified, it is imperative to communicate that: 1) changes comply with the law, and 2) compliance and inclusion are not mutually exclusive. Te intent, in accordance with the law, is to provide equal opportunity for all.


Despite the current political climate, the corporate sector is far from


abandoning DEI principles entirely.


What Lies Ahead Despite the current political climate, the corporate sector is far from abandoning DEI principles entirely. Investors remain divided on the issue, with some asset managers retreating while others maintain their support. Notably, recent shareholder votes atApple,Costco,


and John Deere indicate that investor backing for DEI has not disappeared entirely as shareholders at those companies overwhelmingly rejected anti-DEI proposals. Tis underscores that, while the political landscape is shifting, there remains a strong case for diversity initiatives when positioned through the lens of business value and risk mitigation.


A Balancing Act For IR professionals, the challenge is not necessarily about choosing between supporting or abandoning DEI but rather about navigating a path that aligns with evolving market expectations while safeguarding corporate reputation and financial performance. By aligning DEI initiatives with broader business


objectives and maintaining open communication with investors, IR professionals can help their or- ganizations navigate this complex landscape and emerge stronger and more resilient. Navigating these complexities can help companies emerge resilient amid the changing governance landscape and reinforce long-term commitment to sustainable and profitable growth. IR


Peter Duda is President, Global Corporate Crisis and Issues at Weber Shandwick; pduda@webershandwick. com. Lucia Domville is Executive Vice President, Capital Markets and Corporate Issues at Weber Shandwick and Chair, NIRI Editorial Advisory Committee; ldomville@webershandwick.com.


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