Is DEI really dead?
Behind the headline-making war on diversity programmes by the Trump administration lies a more complex reality.
As a non-white female economist, business professor and former independent director on the corporate boards of US public companies, I have spent my entire career in white-male-dominant worlds. How does my personal experience fit with the academic and professional research assessing the impact of (primarily) gender and ethnic diversity on business and the economy?
Empirical evidence of the benefits of diversity is voluminous and of long standing. Studies in multiple countries by scholars in different disciplines, and by business organisations like McKinsey, Gartner and the World Economic Forum, have found that increased diversity is associated with higher productivity, more innovation, and better financial performance in corporations.
This is not surprising, since a more diverse workforce and leadership team help in talent recruitment and retention, and closer connection to customers, suppliers and partners. Diverse perspectives also facilitate improved understanding and new ideas, in the classroom and laboratory as well as the workplace.
I saw this in my MBA classes as they became more diverse by gender, ethnicity, nationality and educational and career background, over four decades. Twenty years ago, the head of pharmaceutical giant Pfizer’s R&D lab in Ann Arbor, a white male, told a visiting Singapore Ministry of Education delegation that diverse teams were very important for drug discovery. (He also said they discarded resumes noting perfect 4.0 GPAs because this indicated that the candidates “never took any risks”.)
Beyond the measurable economic benefits of diversity, does “representation” matter? It clearly does – one example being the ecstatic response of Asian-American communities to the Singapore-set 2018 film Crazy Rich Asians, followed by the surge in commercially successful Asian-themed movies, including Oscar winners, since then.
As someone who grew up as a member of a majority community, and in its upper socio-economic-educational reaches, I initially did not “get” the importance – to both minorities and majorities – of successful minority “role models”.
But in my MBA classes, I had noticed that American males became more respectful of scarce women faculty like myself when more of them had mothers who were professionals, and had had women bosses. Male students from places where this was still not that common – India, Latin America, some European and Middle Eastern countries – were more likely to be occasionally disrespectful to some women faculty. Female students would often ask that we include in class discussion business cases with women protagonists, which were hard to come by. Women, minorities and international students spoke up more in class as their numbers and share of classroom seats rose.
Mixing it up, breaking barriers
Homophily – the human preference for associating with people like oneself in age, gender, race, religion, education, etc – is a barrier to realising the benefits of diversity. I encouraged students to sit next to “someone who doesn’t look like you” by saying that it made it easier for the professor to remember them for the purpose of class participation grades.
After the only five white women in my diverse class on Asian business one year formed a group by themselves for the group project, I made the group assignments myself, deliberately “mixing them up”. All students invariably said that became the most valuable part of the class, as they got to feel comfortable with, learn from, and become friends with people very different from themselves. Class participation also improved for everybody.
Recognition of the benefits – indeed, the necessity – of diversity led to university, corporate and government efforts to accelerate it, long before the advent of formal institutional DEI programmes and mandates. Federal research grants, for example, required statements of commitment to diversity when I was writing them in the 2000s, through Republican and Democratic administrations alike. I don’t recall us doing anything different as a result.
Perhaps this is why, despite the progress made in MBA, law and medical school programmes, women and ethnic minorities continue to be severely under-represented in many institutions and professions, particularly in their leadership ranks. This lag was particularly highlighted after the 2020 murder of Mr George Floyd, an African American, by a white police officer. One common institutional response to the resulting political and social pressures was the ratcheting up of DEI requirements, often through formal programmes with quantitative targets.
For example, the State of California in 2020 required boards of public companies headquartered there to have a minimum number of individuals from under-represented groups, while Nasdaq in 2021 required companies listed on that exchange to disclose and explain the representation (or lack) of women and minorities on their boards. Both rules were discontinued before the advent of the Trump administration, but the European Union retains its board gender diversity directive.
Such policies were not in effect when I joined my first board, in 1998, and I was the only woman on my second board when I left it in 2016. But recently, search firms have apparently found it “challenging” to place one of my former students on a public company board, because he is a still “over-represented” white male. He has three master’s degrees in business, engineering and Asian studies, and was CEO of a company he took public on the NYSE at a valuation of US$2 billion, when he was 50 years old, and continued to run successfully for another five years. Despite being “collateral damage”, he is not opposed to DEI programmes, since companies which chose “diverse” board members would benefit in other ways.
In the four years since the upsurge of DEI in 2020, a Wall Street Journal analysis of 13 million jobs in S&P 500 companies found little change in workforce dynamics, as “most senior managers are still white men” and racial hierarchies persist. “Black and Hispanic employees still make up a small fraction of executive and other higher-paid professional jobs… (and) fill the majority of hourly service and manual-labour jobs” while “most executives who aren’t white are of Asian descent, as are most lower-level managers and professionals such as computer programmers and financial analysts”. The share in executive and upper professional ranks of white women, the focus of most corporate diversity efforts before 2020, was unchanged.
‘Diversity washing’
Four years is probably not a long enough time for workplace policy shifts to take effect. Accounting researchers have also found that many DEI programmes are merely performative exercises in “diversity washing” – where firms’ public declarations of DEI commitments overhype their actual employee diversity and actions to increase it. This is done to improve firms’ rankings in ESG – environmental, social and governance – metrics that might help them attract capital and talent.
So, if DEI programmes have not made much difference to anyone, why the backlash?
A 2024 Marist poll found that a majority of Americans think the diversity of races, ethnicities and religions in the US either makes the country “much stronger” (42 per cent) or “somewhat stronger” (40 per cent). In contrast, only 10 per cent think this diversity makes the US “somewhat” weaker, and an additional 6 per cent “much” weaker. Majorities of all races support the view that diversity strengthens the US, as do 69 per cent of Republicans and 92 per cent of Democrats. At the same time, significant though diminishing proportions think that race relations in the country have worsened (the 37 per cent who thought this in 2024 was a nine-year low), while most of those who think they have not changed believe the status quo is “bad”. Still, only 28 per cent of Americans “strongly support”, and an additional 38 per cent “support” mandatory DEI training for employees. Other research has shown more support for voluntary programmes, which are also more effective.
Social identity threat
Voluntary or mandatory, such training highlights inequalities and challenges assumptions about fairness, merit and the status quo. This can cause discomfort, especially among insecure members of dominant groups (males, ethnic majorities), who may experience what psychologists call “social identity threat”. Feelings of defensiveness, resentment and fears of “reverse discrimination” can result. These are exacerbated by misinformation and disinformation, including highlighting and exaggerating the prevalence of rare and extreme cases of overreach.
For example, opponents of DEI training like to ridicule the notion of “microaggressions” – offhand comments implicitly or explicitly relating to gender, ethnicity, nationality or some other ascriptive characteristic like height, weight or appearance, that can “trigger” a negative emotional response like anxiety or stress in the comment’s target. This is often unintended and unrecognised by the “perpetrator” (hence the need for “awareness training”), but it does not make it any less real and painful for the “victim”.
Twenty-five years ago, after discussing the Boeing versus Airbus case, a Belgian student in my class complained to the dean that I was “racist against Europeans” because I had spent “10 minutes on Airbus subsidies and two minutes on Boeing subsidies”. Talking to her later, I found that she was very angry and unhappy, disliking America intensely – including (especially?) the food. That caused her to have a visceral negative reaction to a discussion that she saw as unfairly critical of Europe, which she attributed to the racism of a non-European (me).
Around that time, two white women students complained to the dean about a white male professor I was team-teaching with over his use of the phrase “cheap labour in China”, which they thought was “insensitive” to students from China. Nobody had complained about me using the same words, perhaps because I was ethnic Chinese myself. The Chinese students were bemused because, as they saw it, “we do have cheap labour in China”. Today, I think they are more likely to take offence, given the changed dynamic between China and America.
Unwitting microaggressions are not just an American phenomenon. Indian MBA students who had studied, worked and lived in Singapore told me that Singapore Chinese often made “off colour” and “inappropriate” jokes about Indians, even in their presence – and that was one reason they preferred being in America.
The root causes
What, then, are we to make of the current fracas over DEI? We know that diversity has strong economic benefits, that Americans value it, think there should be more diversity, and approve of DEI training. We also know that DEI programmes have downsides, as well as compliance costs, and have not so far been very effective in increasing workplace diversity.
This is probably because, “diversity washing” aside, they do not get at the root causes of gender and ethnic inequalities, which are primarily socio-economic and structural in nature, rather than purely attitudinal and behavioural, though discriminatory attitudes and behaviours do exist.
To realise the economic and social benefits of diversity, then, requires more fundamental societal changes, including in health, education, housing and other public policies. It may be resistance to these, more than disaffection with the mantra and methods of DEI, that has led to the recent dismantling.
- Linda Lim is Professor Emerita of corporate strategy and international business at the Stephen M. Ross School of Business, University of Michigan.
Join ST's Telegram channel and get the latest breaking news delivered to you.
Posts
