From Harley Davidson to Jack Daniels, the steps backwards in inclusion

The latest announcement, in chronological order, was that of Jack Daniels, who, under pressure from a conservative clientele, decided to no longer invest in DEI and no longer participate in annual certifications of Lgbtq+ friendly companies.

Stephen Miller, the 38-year-old far-right political adviser who helped oversee the Trump administration's policy of separating children from their parents who entered the United States illegally, has also entered the battle against a US coporate devoted to diversity. Miller runs the law firm America First Legal, which is leading the crusade against corporate diversity initiatives. America First has filed a number of lawsuits and issued a series of press releases asking the Equal Employment Opportunity Commission (EEOC) to investigate several cases, from Nascar's (National Association for Stock Car Auto Racing) mentoring programme for female drivers to Kellogg's attempts to hire more black people. Mattel and Hasbro did not escape the attacks either. The former is allegedly guilty of public statements by management that it wants to increase the number of women and ethnic diversity in the company, the latter that it wants to achieve ethnic diversity of around 25% by 2025. Lawsuits that, according to the experts, will end in nothing, because while it is true that in the US you cannot by law set precise quotas for hiring or promotions, you can instead set targets.

Instead, the subject of a lawsuit by the conservative non-profit American Alliance for Equal Rights was the venture capital fund Fearless Fund of two black women, which runs a $20,000 funding programme for black female entrepreneurs. According to Deloitte, by the way, only 1% of start-up founders are black women and black female entrepreneurs receive less than 0.1% of all venture capital funding. "So why try to shut down a programme that offers the monetary equivalent of a used Honda?" the Bloomberg commentators wondered.

The issue seems to be more related to American political elections than to business strategies or finance. So much so that studies continue to show that greater diversity, especially at the top of companies, leads to better results for companies.

A recent McKinsey study analysed the operating profit (EBIT) of 1,265 global companies from 23 countries, from the USA to Colombia, from Egypt to Malaysia, from Italy to Japan. The economic results of companies belonging to the worst 25% in terms of diversity and those belonging to the best 25% were compared.

The result showed that the latter achieved better EBIT than the median of companies operating in the same geographic area 39% more often than the former, both considering gender representation and ethnic diversity. In other words, companies with the best inclusion policies are 39% more likely to perform better than the median of the other companies than companies not committed to DEI issues. This is motivation enough not to turn back from an evolution of governance and of human resources management policies, which at least on this side of the Atlantic is making great strides and will also see an acceleration thanks to the European directives 2022/2381 and 2023/970. After the elections, perhaps even in the US companies will go back to looking at their balance sheets rather than political positioning.