Costco’s Oversized Faith In DEI

 Costco's board of directors is receiving praise for defending its "diversity, equity, and inclusion" (DEI) program against a proposal from a conservative group. However, the proposal is simply a request for the board to evaluate and report on the risks of maintaining its DEI roles and policies. Critics of the board's rejection of this proposal claim it shows strength against right-wing pressure. In reality, the board's response indicates a refusal to acknowledge any potential issues.

The board argues that the requested report would not provide useful information, but this claim is unfounded without a risk assessment. Instead, they repeat common DEI statements about diversity being beneficial and suggest that any challenges to DEI come from groups like the National Center for Public Policy Research. They dismiss concerns that DEI policies may lead to discrimination and conflict, insisting that only certain viewpoints are valid.

The board concludes that the proposal reflects a policy bias they oppose, suggesting that dissenting views should not be entertained. This is not a strong defense of DEI policies and ignores evidence presenting risks associated with these initiatives. Recent studies have indicated that the business case for DEI is weakening as more research shows flaws in previous studies supporting these programs. For instance, a study published by some professors claims that previous McKinsey studies, often used to validate DEI, do not support the idea that increased diversity leads to better financial performance.

Additionally, being "woke" could pose real business risks, as highlighted by recent court rulings. Instead of attacking its critics, Costco could consider following the approach of McDonald's, which reviewed its DEI initiatives and decided to adjust some of them. If Costco believes in the strength of its DEI program, it should be open to conducting a review rather than resisting outside scrutiny. Shareholders should express their views when voting on the proposal in the upcoming weeks.

The Issues and Insights platform, run by experienced journalists, aims to provide factual reporting and analysis on current events. They seek donations to support their work, as they prioritize honesty in journalism without being influenced by political biases. Readers can subscribe for regular updates and support their mission.

https://issuesinsights.com/2025/01/09/costcos-oversized-faith-in-dei/