Apple (APPL) investors voted down a proposal to scrap the company's diversity, equity, and inclusion initiatives, backing the tech giant's efforts to push back against a DEI retreat that is taking hold elsewhere in Silicon Valley.
A majority of shareholders on Tuesday rejected the request from the National Center for Public Policy Research, a conservative think tank, that the company "abolish" its DEI efforts because the programs pose litigation, reputation, and financial risks. The company had recommended stockholders reject the proposal.
"We've never had quotas or targets for Apple," Apple's CEO Tim Cook said during the company's shareholder meeting Tuesday.
"Our strength has always come from hiring the very best people and then providing a culture of collaboration, one where people with diverse backgrounds and perspectives come together to innovate and create something magical for our users time and time again."
The stance sets up a stark divide in Silicon Valley as corporate DEI goals come under intensifying scrutiny in Washington, D.C.
Google (GOOG, GOOGL) recently backed away from diversity hiring targets, joining Meta (META) and Amazon (AMZN) among major Silicon Valley firms that have done about-faces on certain corporate diversity initiatives.
Meta said in January it planned to scrap its DEI team. Amazon reportedly told its employees in December the company would wind down outdated diversity programs and materials.
Microsoft (MSFT), on the other hand, has said it is keeping its talent, diversity, inclusion, and learning team intact. In December, its chief diversity officer Lindsay-Rae McIntyre published a defense of the company's approach to the issue on LinkedIn.
"The business case" for diversity and inclusion, wrote McIntyre, "is not only constant but stronger than ever.”
Cook on Tuesday referenced some recent legal developments that are causing many companies to reconsider their DEI stance, saying "as the legal landscape around these issues evolves, we may need to make some changes to comply."
But he added that "we'll continue to work together to create a culture of belonging where everyone can do their best work, and we'll remain committed to the values that have always made us who we are."
Momentum for sunsetting DEI programs gained steam in 2023 when the US Supreme Court decided a set of cases in Students for Fair Admissions v. Harvard that outlawed race as a factor for colleges to make admission decisions.
The court held that race-based considerations were discriminatory and violated the Constitution's 14th Amendment and Equal Protection clause.
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In another case in 2024, the high court lowered the standard for employees to sue their employers over alleged discrimination.
Impact from the decisions spilled over into the business world as DEI opponents warned that the court's reasoning could also apply to private companies and that maintaining programs could invite litigation.
Even more pressure to end DEI in the private sector came in an executive order signed by President Trump on his first day in office. The order ended federal DEI programs, and instructed US agencies to “combat illegal private sector DEI actions.”
NCPPR in its effort to foreclose diversity programs at Apple said the Supreme Court’s decision called into question the legality of the tech giant's corporate DEI programs. The group also referenced 13 state attorneys general who similarly warned that the holding could impact corporate DEI programs.
Sixteen other attorneys general took an opposing view, writing in a joint memo that private DEI programs “are not illegal” and that the federal government had no authority to issue an executive order prohibiting "otherwise lawful activities in the private sector.”
DEI opponents also argue that diversity programs pose a greater risk to private companies, like Apple, that serve as federal contractors. Trump’s executive order requires federal contractors to certify that their DEI programs do not violate federal anti-discrimination laws.
“It’s clear that DEI poses litigation, reputational and financial risks to companies, and therefore financial risks to their shareholders, and therefore further risks to companies for not abiding by their fiduciary duties," NCPPR said in an email to chof360 Finance.
In addition to the National Center for Public Policy Research other organizations have pushed for shareholder votes ending DEI. The National Legal and Policy Center and the Heritage Foundation submitted various shareholder proposals seeking changes or deeper examinations of DEI practices.
NCPPR and NLPC submitted anti-DEI proposals to Goldman Sachs (GS) and JPMorgan Chase, while Bank of America (BAC) and Citigroup (C) got proposals from NLPC and Heritage asking for audits of how the banks treat customers with certain political beliefs.
Over the past year, a range of companies from other industries have done about-faces on diversity, including Meta (META), Walmart (WMT), McDonald's (MCD), Lowe’s (LOW), Ford (F), Tractor Supply (TSCO), John Deere (DE) and Target (TGT).
Alexis Keenan is a legal reporter for chof360 Finance. Follow Alexis on X @alexiskweed.
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