Overview

• Costco's Board of Directors has unanimously recommended shareholders vote against a proposal to assess the risks of its diversity, equity, and inclusion (DEI) program at the January 23 annual meeting.
• The proposal, introduced by the conservative National Center for Public Policy Research, argues that DEI initiatives pose legal, financial, and reputational risks, citing recent lawsuits and a Supreme Court ruling on race-based policies.
• Costco has rebranded its DEI program as 'People and Communities' but maintains its commitment to diversity, including hiring practices, supplier diversity, and a Chief Diversity Officer role.
• The board defends DEI as essential to fostering innovation, attracting talent, and reflecting its diverse customer base, stating the policies comply with legal standards.
• The outcome of the shareholder vote could signal broader trends in corporate America's approach to DEI as many companies, including Walmart and John Deere, have scaled back similar efforts recently.