When one applies the same reasoning that DEI proponents apply when anti-DEI shareholder proposals are defeated, the following three votes make a strong case for concluding that over 90% of shareholders reject DEI.
First, a pro-DEI proposal at Berkshire Hathaway Inc. (Proposal 6 here) requested “that Berkshire Hathaway designate a Board Committee to oversee the Company’s diversity and inclusion strategy across its holding companies.” We can fairly designate this a pro-DEI proposal because in the supporting statement the proponent bemoaned the fact that Berkshire does not “release aggregated promotion, hiring, and retention rate data by gender, race, and ethnicity” and cited debunked McKinsey studies for having “consistently found that companies with greater diversity in corporate leadership are more likely to outperform peers on profitability.” (On this last point, Alex Edmans, a Professor of Finance at London Business School, has noted that: "There is no link between demographic diversity and performance, despite many flimsy reports claiming the contrary.... Indeed, the evidence is that quota-driven demographic diversity reduces performance.") According to my math, which readers are encouraged to double-check throughout, the proposal was defeated by 98% votes against.
Second, a pro-DEI proposal at Netflix (Proposal 6 here) requested the board to “amend the publicly available Code of Ethics to expand the topic ‘Inclusive & Respectful Work Environment,’ addressing key issues such as non-discrimination, anti-harassment, and whistleblower protection.” Again, we can reasonably conclude that this is a pro-DEI proposal because the supporting statement bemoans the fact that “female representation on Netflix’s board stands at 31%.” This time, the proposal was apparently defeated by 94% votes against.
Finally, a pro-DEI proposal at Walmart (Proposal 8 here) requested a “a third-party, independent racial equity audit analyzing Walmart’s adverse impacts on Black, Indigenous and People of Color (BIPOC) communities, and providing recommendations for improving the company’s racial equity impact.” Again, the proposal was defeated, this time apparently by 92% votes against.
In light of all the foregoing, the reader may ask why I added an asterisk to the headline proclaiming: “Over 90% of Shareholders Reject DEI.” The reason is that anti-DEI proposals were defeated by similar margins at the same meetings, so it would be quite a stretch to draw such a conclusion – though pro-DEI propagandists posing as journalists happily do so repeatedly.
So, how should we reconcile these seemingly inconsistent outcomes? One view takes the following approach.
First, in a country wherein the electorate arguably sent a strong anti-DEI message in the most recent presidential election, it borders on incredible for shareholder proposals designed to rein in corporate DEI to be defeated by over 90% votes against. As Jerry Bowyer put it recently: “no one seriously believes that in a free and fair election—where asset owners are actually told how their money is being voted—99% of investors would say: ‘No, I don’t want to know anything more about whether shareholder dollars paying for puberty blockers for kids is risky for the company.’”
Second, one obvious explanation for such votes is the conflicts of interest that the Big 3 asset managers and the Big 2 proxy advisors are subject to because they make money on selling ESG/DEI funds and consulting.
Third, management is arguably similarly conflicted not only because of the pressure managers get from those same asset managers and proxy advisors, but because DEI and ESG basically constitute a full employment act for managers, given how many bureaucrats it takes to run these programs.
Fourth, evidence of the influence of these asset managers, proxy advisors, and managers getting anti-DEI states and institutions to vote against their interest exists (see here and here).
Finally, while all the foregoing suggests shareholders aren’t actually as pro-DEI as anti-DEI vote counts suggest, the response of asset managers and proxy advisors to public and political pressure regarding their politicized voting has been to simply vote against both pro- and anti-DEI proposals. This is certainly better than voting for pro-DEI proposals and voting against anti-DEI proposal, but that still leaves room for pro-DEI sentiments being under-represented.
Accordingly, apply a healthy dose of skepticism the next time you see a headline proclaiming that over 90% of shareholders support DEI because an anti-DEI proposal was defeated by that margin.
The bottom line is that no corrupted voting regime should convince you that the true owners of corporations think it’s a good idea to discriminate on the basis of race and sex in the name of DEI or to use shareholders’ money to promote gender mutilation surgery in minors. That’s just plain common sense.
