The recent Supreme Court decision to strike down race-conscious affirmative action programs in higher education reversed decades of legal precedent on remedial approaches to increase enrollment of historically disadvantaged communities.
Yet institutions of higher learning are not the only organizations to feel the impact of the ruling: attention has shifted to corporate America and the many companies that have adopted similar rationale to build a diverse workforce.
Although the Court’s decision does not directly affect workplace laws, critics of affirmative action emboldened by the landmark reversal are mounting fresh challenges to businesses and organizations.
Companies both large and small must be prepared for the ripple effect of the ruling as their policies come under greater legal and public scrutiny, and commitments to diversity, equity, and inclusion (DEI) are severely tested.
The State of Corporate DEI
Courts have repeatedly upheld DEI programs, such as recruiting qualified female and minority job applicants to counter existing discrimination. Following the 2020 murder of George Floyd and the national racial reckoning that ensued, many companies leaned heavily on these tools to actively respond to the moment.
Microsoft, for example, pledged to significantly increase the number of Black senior executives and Black-owned partner businesses. For its part, JPMorgan Chase & Co. promised to increase the number of mortgages to Black and Latino homebuyers by 40,000. Together, more than 1,300 U.S. companies have committed about $340 billion to advancing racial equity.
Today, however, these businesses are caught between two opposing sides: those supporting affirmative action to combat blatant past discrimination and those who argue that the Court’s ruling should also apply to the private sector.
Before the ruling, more than 80 of the nation’s largest companies filed an amicus brief with the Supreme Court supporting affirmative action in college admissions as a way to help them build a diverse workforce. After the ruling, 13 Republican state attorneys general warned Fortune 100 companies that such practices might now be illegal. Alternatively, states with Democratic attorneys general told the same CEOs that the policies are not only legal but should be expanded.
Many CEOs vow to maintain these initiatives. Yet, others — faced with potentially high legal costs and damaging social media campaigns from hostile activist groups — are either quietly curtailing programs or eliminating them altogether. Chief diversity officers are being let go, and companies are even revising how they talk about diversity.
Instead of Retreating, Double Down
If our experience developing DEI programs for high-profile organizations has taught us one thing, it’s that abandoning these crucial initiatives would be misguided and extremely harmful.
To fully maximize a DEI program requires consistency, attention, and investment. Anything short of this commitment will invariably lead to diminished returns and missed opportunities, as well as tarnishing the company’s brand if the organization appears to be disingenuous about its intentions.
Simply put, DEI speaks to people’s lives and livelihoods. Organizations must engage with these critical issues even as political culture wars, and accusations of “woke capitalism,” may come and go. The movement designed to build career pathways, increase opportunities, and establish generational wealth for marginalized communities should not be viewed as a pawn to score points.
Scaling back a DEI program today could very well signal that an organization is not serious about confronting the history of discrimination and injustice in the workplace. It also disregards the important role that companies can play to help remedy these wrongs and build a brighter future for disadvantaged communities.
Equally important, rolling back workplace affirmative action at this critical time reflects short-term thinking, when the imperative should be to focus on the well-proven benefits of diversity for all employees and stakeholders that accrue over time.
Diverse workplaces with a range of people of different ages, genders, ethnicities, and cultures provide a wider perspective of the world to the business and awareness of untapped demographics, opening opportunities for creativity and innovation, capturing new markets, and boosting financial returns.
How to Create a Culture of Inclusion in this New Environment
Now is not the time to be complacent. As the repercussions of the Supreme Court decision continue to unfold, business leaders must act decisively to ensure that the achievements attained over the past years are protected and can be built upon.
Invest with intention.
Businesses must be more intentional about investing in DEI and fostering equitable work environments in which everyone feels included and has a sense of belonging, regardless of race, color, or creed. In addition, leaders must integrate equity goals into hiring, performance evaluations, and professional development—and design ways to measure progress toward this goal. Furthermore, benchmarks must go beyond focusing solely on representation.
We have, for instance, helped organizations develop a holistic index of socioeconomic benchmarks for the hiring process that include but are not limited to race—similar to what the University of California, Davis School of Medicine uses to build one of the most diverse student bodies in the country.
Review and update programs to mitigate legal risk.
Although the July affirmative action ruling did not directly impact Title VII of the Civil Rights Act, which covers affirmative action and discrimination in the private workplace, some of the language within the majority and concurring opinions may very well motivate activist groups to initiate “reverse discrimination” lawsuits challenging the legality of corporate DEI programs.
As a precautionary measure, companies should review their DEI-related communications, procedures, and measurement frameworks to protect their organization and programs. This may include redefining internal and external goals, making sure hiring and recruiting processes are legally compliant, investing in or doubling down on implicit bias trainings, and maintaining clarity and alignment amongst HR staff and relevant leaders on their DEI program’s goals and parameters.
Identify diverse talent pipelines.
The Court’s affirmative action ruling will likely force companies to consider new and more diverse sources of talent at the collegiate level. After California passed a 1996 ballot measure to end affirmative action in higher education, the number of Black, Hispanic, and Native American students fell by as much as 40 percent. Workforce participation for these workers also declined, according to a 2013 Harvard study.
Companies can help play a significant role in avoiding that same result by expanding their talent recruitment pools. For example, companies that tend to spend much of their recruitment capital on traditionally elite, predominantly white universities can begin to also engage with smaller regional schools and community colleges, particularly those with large, racially diverse student bodies.
In particular, historically Black colleges and universities (HBCUs) are well positioned to be an essential source of talent, as they account for 10 percent of all matriculating Black students in the country. Yet, they are underfunded, with the 10 largest HBCU endowments being 100 times smaller than the 10 largest endowments for predominantly white institutions, according to a Brookings report.
Companies must also boost partnerships with student mentorship programs as early as middle or high school, to counter the expected reduction in the enrollment of underrepresented populations due to race-neutral admissions. Numerous studies have linked youth mentoring to several benefits including increased rates in high school graduation, college enrollment, and improved behavior within and outside of school. MENTOR, a national mentorship nonprofit organization, has also highlighted the valuable benefits of corporate-led mentoring programs.
Showcase leadership through communications and data.
Finally, we recommend that company leaders speak openly and proudly about the virtues of DEI to a wider audience. Communications and outreach should emphasize the benefits not just to a single group, but to all stakeholders—and how eliminating such programs would both negatively impact communities as well as future profit margins.
Organizations should also work to identify and track the wealth of data that could be available to them. This may include internal tracking of progress and goals, as well as external, community-informed data to help better target efforts and maximize the impact of their program.
The Ichor Index is a great example of a data source that functions as an adaptive tool for companies to better understand key pain points to address within targeted cities and neighborhoods.
Lastly, these strategies will allow companies to better narrativize their goals and successes, and place company leaders on strong footing to advocate on behalf of their efforts in the face of increased public and legal scrutiny. Dynamic DEI storytelling can speak to addressing historical wrongs, strengthening inclusion and belonging, and driving positive impact both within an organization and in the community.
As we enter this unpredictable post-affirmative action era, businesses and organizations can show leadership in this space by promoting and supporting equity across the board.
Learn more about how Ichor advises clients in the DEI space to meet the evolving needs of employees, shareholders, consumers, and the communities around them.
Ahmed Karrar is an attorney and public affairs professional who leads Ichor’s Strategic Initiatives team. He has a background in political campaigning, community organizing, and working with social-service nonprofit organizations.
Gina Ricard is a consulting professional with demonstrated success in project management, marketing, and execution of strategic initiatives across government, nonprofit and private sectors. She is a core member of Ichor’s DEI practice and Strategic Initiatives team.
Both Ahmed and Gina are based in the Chicago office.
Disclaimer: The content within this article should not be construed as legal advice and is solely for general informational purposes.