The defenders of corporate diversity, equity, and inclusion (DEI) programs cannot stop twisting the truth. Their arguments are so flimsy that they rely on sleight of hand, misrepresentation, and wishful thinking to keep the DEI project alive.
First, consider shareholder votes. DEI advocates love to point to low vote counts on anti-DEI shareholder proposals as evidence that investors are overwhelmingly supportive of DEI. But this is misleading. They conveniently ignore the fact that pro-DEI proposals often receive similarly low levels of support. If a 5 percent vote in favor of a “diversity initiative” is heralded as a mandate, then logically a 5 percent vote against DEI should be treated as equally meaningful. And even when recent pro-DEI proposals have done relatively well, they have not sniffed majority support. Selective reporting betrays not just bias but dishonesty.
Worse still, these vote counts are distorted by institutional conflicts of interest. Large asset managers and proxy advisory firms—who have their own reputational and financial incentives tied to progressive causes—routinely nudge or outright pressure companies toward DEI compliance. This undermines the legitimacy of pro-DEI shareholder votes. Investors are not necessarily demanding these programs; they are often being steered toward them by intermediaries who benefit from signaling their ideological purity.
Second, the “business case for diversity” is another myth DEI proponents cannot give up. For years they have insisted, without solid evidence, that hiring and promoting based on demographic characteristics leads to higher profits and better performance. Yet one of the top experts on empirical claims in management research has said plainly: “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.”
This isn’t just one contrarian opinion. A recent meta-analysis—synthesizing dozens of studies—has reaffirmed that the supposed business benefits of DEI are far more myth than reality. While individual papers, often backed by advocacy groups, trumpet small correlations between “diverse teams” and innovation, the overall weight of the evidence shows no consistent or causal link. In fact, attempts to engineer workforce demographics through quotas or preferences often backfire by fostering resentment, lowering morale, and undermining merit-based advancement.
Recognizing this, companies have begun to quietly shift their language. Once, executives would confidently declare, “We know diversity is good for business.” Now, many hedge their bets by saying they believe it is good for business—a revealing downgrade from certainty to faith. This linguistic retreat betrays the weakness of their case. While some continue to fall back on race-essentialist justifications by claiming, for example, that “a diverse group of employees helps bring originality and creativity to our merchandise offerings,” this is little more than stereotyping with a positive spin. It assumes people of different races or sexes think in predetermined ways—a view that is itself contrary to the principles of equality. (For examples of all the foregoing, see here.)
Such rhetorical shell games may buy time, but they won’t shield companies from accountability. When DEI programs lead to illegal discrimination—as they inevitably do when hiring or promotions are based on race, sex, or ethnicity—companies will face lawsuits. And under corporate law, executives who pursue strategies “because they believe in them” cannot hide behind belief when the data shows those strategies are ineffective or harmful. Fiduciary duty requires decision-making grounded in evidence, not ideology.
This is why we are beginning to see a reckoning. Recent legal developments, including official guidance clarifying what constitutes unlawful DEI practices, make it clear that companies cannot continue to justify discriminatory policies under the guise of “diversity.” Courts and regulators are paying closer attention, and shareholders will eventually demand answers when resources are squandered on initiatives that have no demonstrable business value and expose firms to liability.
The collapse of the business case for DEI leaves its proponents in a bind. They can continue to peddle myths and risk legal exposure, or they can begin to dismantle programs that were built on false premises. Either way, the truth is catching up with them.
DEI proponents cannot stop lying because the truth is fatal to their cause. Once stripped of selective statistics, cooked-up correlations, and ideological cover, DEI is revealed for what it is: a political project that undermines merit, sows division, and places companies on a collision course with both the law and their fiduciary obligations.
The sooner corporations face that reality, the better for their employees, their shareholders, and the principles of equality they claim to uphold.
