Shareholders for the Kellogg Company are scheduled to vote Friday on a proposal to audit the multinational food conglomerate’s adherence to the diversity, equity, and inclusion movement, also known as DEI, and return the company to hiring and promotion decisions based on merit.
The proposal, which the board of directors recommended that shareholders oppose, would launch an examination of the company’s DEI initiatives with an ideologically diverse and independent group of employees, shareholders, and third-party entities. The text of the proposal noted that the Kellogg Company has “allocated significant resources and attention towards implementing social justice into workplace practices” through commitments to the environmental, social, and corporate governance movement, also known as ESG.
“Across the political spectrum, all agree that employee success should be fostered and that no employees should face discrimination, but there is much disagreement about what nondiscrimination means,” the proposal said. “In practice, what ‘equity’ really means is the distribution of pay and authority on the basis of race, sex, orientation and ethnic categories rather than by merit.”
Increasing the percentage of females or racial minorities in corporate workforces are indeed objectives often pursued by firms with DEI initiatives or dedication to the ESG movement. Both philosophies have rapidly grown in prominence among leading companies in recent years, even as skeptics contend that they mingle political and social causes with core business objectives in a manner that compromises or distracts from profitability.
The shareholder proposal, which called for a “return to merits,” noted that firms across a number of industries, from Verizon and Pfizer to American Express and CVS, have implemented similar policies despite the likelihood of overt discrimination against qualified staff members.
Executives at the Kellogg Company have vowed to achieve a global management team equally composed of men and women by the end of 2025 and ensure that one-quarter of American managers come from underrepresented racial groups over the same time horizon. Kellogg Company Chief Diversity Officer Samantha Thomas-Berry recently lauded the firm’s progress toward the goals and asserted that executives will successfully impose “more balanced representation in our leadership.”
“Such programs have raised significant objections, including the concern that the programs and practices themselves are deeply racist, sexist, otherwise discriminatory, and potentially in violation of the Civil Rights Act of 1964,” the proposal continued. “By devaluing merit, corporations have sacrificed employee competence and morale, and therefore productivity, to the altar of ‘diversity.’ These practices create massive reputational, legal and financial risk.”
Increased tumult in the economy has increased skepticism toward the ESG movement among some managers and investors. ESG funds suffered amid last year’s underperformance among technology firms, which ESG investors tend to favor because of their emphasis on corporate social responsibility, and overperformance among energy companies, which ESG managers tend to shirk because of their dislike for industries with heavy carbon emissions.
Americans are broadly skeptical of the ESG movement’s core assumptions and desire that the companies in which they invest abstain from forwarding ideological objectives favored by executives. An exclusive poll conducted by The Daily Wire last year showed that 58% of respondents opposed companies leveraging their financial power for political or social means, an approach to company operations which 29% of respondents supported.