DEI initiatives in the US are under attack. Liz Stanley and Grace Barnett-Cox look at why the evidence in favour of maintaining gender diversity programmes still stands up.

In recent weeks, headlines have been dominated by US companies scaling back their DEI (diversity, equality, and inclusion) initiatives. The Trump administration clearly has DEI in the firing line, with the US president even blaming a plane crash in Washington DC on “diversity hires” in air traffic control.

Big names like McDonald’s and Meta are among those rebranding or even dismantling their diversity programmes in response to increasing political and societal pressures. But the question remains: can businesses afford to roll back these efforts without risking their future performance? The evidence suggests that the answer is an unequivocal no.

DEI under attack

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Gender diversity is not political correctness or wokeism; it’s critical to competitiveness, innovation, and ultimately performance. Companies with diverse pipelines of talent who bring broader perspectives benefit from enhanced creativity, problem-solving, and decision-making.

In addition, research from Catalyst shows that inclusive pipelines and cultures can boost an organisation’s reputation by almost 60%.

A lack of representation, on the other hand, can actually alienate younger consumers and employees who prioritise companies that reflect their values and the diversity of society.

Rising controversy

So, why are US companies turning away from DEI? Several factors are at play, including growing public pressure from conservative segments of US society and a number of high-profile decisions, including the Supreme Court’s November 2023 ruling, which deemed race-based university admissions unconstitutional.

DEI has now become a matter of extreme controversy in the US, resulting in companies removing, revising, and rebranding their diversity policies.

McDonalds, for example, has rebranded its DEI efforts as an evolution, focusing solely on “inclusion” and retiring key diversity and equity goals. While the company frames this as progress, many view it as a significant rollback of its DEI commitments.

At The Pipeline, we believe that the evidence on gender diversity is clear. It is not just a matter of social responsibility, but a smart, and essential, business strategy.

Rolling back commitment and investment undermines years of progress and sends the wrong message at a time when DEI initiatives are more critical than ever for fostering innovation, engagement, and sustainable success.

Weighing up the costs

Recent data from BlackRock highlights exactly why DEI initiatives are so important for business success. Its research indicates that companies with the most diverse workforces achieved a 29% higher annual return on assets compared to their least diverse counterparts.

In addition, McKinsey’s 2023 report showed that companies in the bottom quartile for diversity on their executive teams were 66% less likely to experience financial outperformance – a significant jump from 27% in 2020, although this has since been questioned.

Evidently, the cost of ignoring DEI is getting more expensive. If businesses want to increase innovation and profitability, they cannot afford to deprioritise initiatives which actively work towards gender parity.

To reverse this trend, businesses need to embrace gender diversity as a long-term, strategic priority. It requires shifting the narrative away from viewing DEI initiatives as burdensome or reactionary and instead recognising them as integral to business resilience and growth.

Success factors

Based on over 12 years of experience working with more than 130 organisations and our continuous review of research, we believe there are four key success factors in gender-inclusive organisations:

Lead from the top: visible, committed leadership is essential to achieving gender parity. Companies that are frontrunners in DEI have CEOs and senior leaders who embed diversity into their core strategy and hold themselves accountable for results.

For example, Salesforce CEO Marc Benioff implemented company-wide pay audits to address gender pay gaps, reinforcing that equality isn’t optional but a priority tied to business success. When leadership champions gender parity, it sets the tone for sustainable change.

Build inclusive cultures: sustainable progress depends on creating workplaces where women can thrive at all levels. Those who succeed at building inclusive cultures address systemic barriers in hiring, pay, and development.

Spotify is a prime example, fostering inclusivity with flexible work policies, mentorship programs, and transparent promotion pathways. Our research shows such cultural shifts are more effective in driving innovation and long-term growth than isolated initiatives.

By using data to benchmark progress, businesses can ensure accountability and make informed adjustments.”

Measure progress and drive accountability: the old adage ‘what gets measured gets done’ applies to DEI as well. Thriving companies set clear goals for gender representation and tie them to performance metrics.

For example, Schneider Electric publicly tracks diversity targets and links them to executive performance reviews, driving measurable improvements across its global operations. By using data to benchmark progress, businesses can ensure accountability and make informed adjustments.

Commit for the long term: gender parity requires sustained commitment. Progress can easily stall without consistent focus, as seen across industries with persistently low representation of women in leadership.

IBM, for instance, has maintained a multi-decade focus on building diverse leadership pipelines, showing that long-term investment yields transformative results. These companies resist the temptation to declare victory prematurely and instead treat gender equality as an ongoing journey – a prime example to follow.

Recent media coverage of US companies rebranding their DEI initiatives highlights the risks of short-sightedness.

When organisations face political pressures or criticism of their DEI strategies, the temptation may be to retreat to more traditional approaches.

This not only risks undoing cultural and organisational benefits of diversity but also risks profitability and performance potential. As the world becomes more interconnected and diverse, companies that fail to adapt and commit to gender diversity will find themselves left behind.

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