Beyond the Ruling: Why Companies Must Double Down on DEI Strategies

Jul 7, 2023 | Blogs

On June 29th, the Supreme Court ruled to take race-conscious admissions programs out of colleges and universities.

What’s the situation? Affirmative action, which was institutionalized in the 1960s, was a method for higher education institutions to diversify their student population by considering race in their admissions. This historic decision to remove affirmative action from colleges and universities has brought many conversations to the forefront in terms of justice and fairness. Notably, a 2019 study published by the National Bureau of Economic Research found that 43% of white students admitted to Harvard College were athletes, legacy students, children of donors and high-profile people, or children of faculty and staff—statistics that show that pure meritocracy is more difficult to achieve than removing affirmative action.

While some associate affirmative action only with race, it has also been beneficial for women, people with disabilities, LGBTQIA+ individuals, veterans, and other historically marginalized and systemically excluded groups. Affirmative action in higher education was an imperfect solution, but it was also one of the U.S. policies that acted as a corrective measure for historical inequity and provided opportunities for systemically excluded communities.

How does this tie into corporations? Although this decision does not directly affect corporate diversity efforts, it has led companies to fear the possible repercussions because of the perceived link.

The discussion also comes about as critiques arise over companies’ shallow DEI progress, the declines in diverse new hires, and the disproportionate amount of layoffs for DEI roles. However, leading companies are continuing with their 2020 commitments and remembering that they championed DEI efforts due to the murders of George Floyd and numerous other Black lives and the systemic injustices in our society.

Many believe that organizations should focus solely on meritocracy, but pure meritocracy is an extraordinarily difficult feat. A Princeton University Press article states, “In competitive contexts, many have merit, but few succeed. What separates the two is luck. In addition to being false, a growing body of research in psychology and neuroscience suggests that believing in meritocracy makes people more selfish, less self-critical and even more prone to acting in discriminatory ways…Perhaps more disturbing, simply holding meritocracy as a value seems to promote discriminatory behaviour.” As an example, in a study published by Cornell University, researchers found that “when an organization is explicitly presented as meritocratic, individuals in managerial positions favor a male employee over an equally qualified female employee by awarding him a larger monetary reward. This finding demonstrates that the pursuit of meritocracy at the workplace may be more difficult than it first appears and that there may be unrecognized risks behind certain organizational efforts used to reward merit.” By realizing that pure meritocracy is unattainable in a world full of unconscious and conscious biases, we can more fully recognize the importance of corporate DEI initiatives.

What should companies do moving forward?

1.Continue to stay the course on DEI policies and initiatives: Throughout the last few years, companies have put out statements and commitments regarding racial equity – continue to enact your company’s DEI strategic plans. The college admissions case alleged violations of the US Constitution’s Equal Protection Clause and Title VI of the Civil Rights Act while corporate DEI initiatives fall under Title VII of the Civil Rights Act. Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin.

2. Go beyond the business case: The business case for DEI has been made abundantly clear, with research and data to show that DEI fosters innovation and in turn leads to long-term profits. Last year, JUST Capital released survey data that 92% of the U.S. population overall believe that companies should promote racial equity in the workplace and 68% say that companies have more work to do to achieve it. However, solely focusing on the business case for DEI dehumanizes historically excluded people, as reiterated in articles such as Harvard Business Review, Inc, Forbes, and Nonprofit Quarterly. Additionally, a 2023 research study has found that only using business cases to rationalize the need for diversity can ultimately lead to historically excluded people paradoxically feeling less belonging and desire to join a company.

3. Partner with peer companies and know that you’re in good company: Over 65 large companies, including Kraft Heinz, Johnson & Johnson, and Proctor & Gamble, petitioned that ending affirmative action in colleges and universities would harm the future of diverse workforces and business performance. Their amicus brief arguments to the Supreme Court included the fact that companies rely on the school system to educate and train future workers that have exposure to an array of life experiences and viewpoints. After the Supreme Court’s decision was made, companies recommitted their efforts; Barron’s reached out to more than 40 companies asking how the end of affirmative action would affect their DEI initiatives. All 13 that responded said they won’t shift course, and Salesforce notably stated, “Our commitment to equality doesn’t waver, and we will continue to work toward our representation goals, regardless of the ruling.”

4. Double down on efforts to dismantle systemic biases The heart of DEI goes beyond the demographics of the workforce – it is about dismantling systemic biases. With the understanding and historical context behind why a concept like affirmative action is so important, companies and leaders can remember that DEI is more than just an initiative, but it is about playing a part in correcting systemic wrongs that affect everyone on a daily basis.

In response to the Supreme Court’s decision, the U.S. EEOC Chair declared that it “does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” Employers are legally allowed to provide opportunities for systemically excluded groups in the workforce, and leading companies will continue to create high ambition goals for DEI.

In her dissent, Justice Brown Jackson wrote, “Our country has never been colorblind. If the colleges of this country are required to ignore a thing that matters, it will not just go away. It will take longer for racism to leave us. And, ultimately, ignoring race just makes it matter more.”