The National Center for Public Policy Research has sponsored a series of conservative shareholder proposals asking companies to reconsider their diversity programs. The one recently offered at Costco is typical:

It’s clear that DEI holds litigation, reputational and financial risks to the Company, and therefore financial risks to shareholders.

And yet Costco still has such a program, though it was apprehensive enough to recognize this as it recently and quietly rebranded its DEI program to “People and Communities.”  But sticking a new label on discriminatory practices does not protect Costco and its shareholders from these risks….

With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of illegal discrimination because they are white, Asian, male or straight.  Accordingly, even if only a fraction of those employees were to file suit, and only some of those prove successful, the cost to Costco could be tens of billions of dollars.

Resolved: Shareholders request that the Board conduct an evaluation and publish a report, omitting proprietary and privileged information, on the risks of the Company maintaining its current DEI (including “People & Communities”) roles, policies and goals.

Costco’s response was not:

The proponent professes concern about legal and financial risks to the Company and its shareholders associated with the diversity initiatives. The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the Company but abolition of diversity initiatives. A 2023 federal district court decision, in a case brought by the proponent, noted that the proponent had “published a document called ‘Balancing the Boardroom 2022,’ which describes its shareholder activism as ‘fighting back’ against ‘the evils of woke politicized capital and companies.’ [The proponent went] on to describe ‘CEOs and other corporate executives who are most woke and most hard-left political in their management of their corporations’ as ‘inimical to the Republic and its blessings of liberty’ and ‘committed to critical race theory and the socialist foundations of woke’ or ‘shameless monsters who are willing to sacrifice our future for their comforts.'” National Center for Public Policy Research v. Schultz, E.D. WA. (Sept. 11, 2023)….

We believe that the proponent’s request for a study reflects a policy bias with which we disagree and that further study and reporting would not be an efficient use of Company resources.

Tl;dr version: