We’ve Known It for Years: Diversity, Equity, and Inclusion Programs Don’t Work
Corporate America needn’t have waited for Trump or the Supreme Court: The business case for ditching DEI has been sitting in plain sight for years.
In January, the world’s second-largest restaurant chain, McDonald’s, and Meta, the parent company of Facebook and Instagram, both joined the long list of multinational corporations that have announced they are discontinuing their formal diversity, equity, and inclusion (DEI) programs. It’s a trend that also includes such household names as Amazon, Walmart, Molson Coors, Ford Motor Co., John Deere, Lowe’s, Harley-Davidson, Toyota Motor Corp, and, as of this week, the U.S. federal government: Donald Trump’s administration has ordered all federal workers staffed in DEI roles to be placed on paid leave.
In explaining its move, McDonald’s cited the “shifting legal landscape”—specifically, a June 2023 US Supreme Court decision that struck down race-based affirmative-action programs in college admissions as unconstitutional. In its memo to employees, Meta likewise cited Supreme Court jurisprudence, as well as the fact that “the term ‘DEI’ has also become charged, in part because it is understood by some as a practice that suggests preferential treatment of some groups over others.”
Raquel Rosario Sánchez
While Trump’s name doesn’t appear in these memos, the president’s previous comments likely played a role in corporate decision-making. This week’s anti-DEI executive order was no surprise, as Trump had pledged to “eliminate all diversity, equity and inclusion programs across the entire federal government”; and his most vocal conservative supporters typically attack DEI as being inspired by “woke” or even Marxist principles—an affront to the merit-based ethos.
Trump has also spoken about using his executive powers to withhold federal funding from cities, states, and publicly funded educational institutions that continue to promote DEI. And there are indications that his administration may find ways to pressure private-sector entities to abandon DEI as well.
What I find curious, however, is that none of these companies have—to my knowledge—publicly stated the more important rationale for abandoning DEI policies: Despite the casually expressed assumption that such programs improve harmony and reduce conflict within organisations, there is no substantial evidentiary basis for that claim. Bluntly stated, DEI programs don’t work.
This was the conclusion I reached after surveying the relevant academic literature—as summarised in a scholarly report recently produced for The Aristotle Foundation, a Canadian think tank. And I am hardly the first to reach this conclusion: One 2021 meta-analysis, covering over 400 studies of DEI initiatives, found their effect on reducing prejudices to be extremely limited. And even such marginal effects as the original studies reported, the meta-study noted, may well be an artefact of “exaggeration” on the part of “optimistic” researchers.
Quillette
Another DEI meta-analysis, this one conducted in 2022, bluntly concluded that the implementation of DEI initiatives (which are described by the authors as Diversity Training, or DT) “has clearly outpaced the available evidence that such programs are effective in achieving their goals.”
As I note in my own report, in fact, a substantial number of studies are consistent with the opposite conclusion: that DEI training actually increases bigotry, foments division, and possibly even imposes psychological harm by seeking to convince otherwise tolerant and liberal-minded trainees that they harbour hidden forms of hatred.
Many DEI programs may actually increase bigotry and foment division by seeking to convince otherwise tolerant and liberal-minded trainees that they harbour hidden forms of hatred.
A groundbreaking study published in 2024 with the assistance of Rutgers University’s Social Perception Lab found that DEI instruction—“anti-racism education,” in particular—can amplify “perceptions of prejudicial hostility where none was present,” as well as encourage “punitive responses to [such] imaginary prejudice.”
These findings aren’t that new. In 2017, Katherine Klien, a professor at Wharton Business School, explored the existing studies on gender diversity within corporate structures. Writing in a University of Pennsylvania business journal, she concluded:
Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Nor do they perform worse. Depending on which meta-analysis you read, board gender diversity either has a very weak relationship with board performance or no relationship at all.
Three years later, the authors of a Harvard Business Review article reported similar conclusions. “As for studies citing the positive impact of racial diversity on corporate financial performance, they do not stand up to scrutiny either,” they wrote. “Research shows that things often get worse, because increasing diversity can increase tensions and conflict.” (Notably, that article appeared in late 2020, just months after the murder of George Floyd—a time when criticising DEI was seen as politically taboo.)
Quillette
Needless to say, diversity in and of itself can bring many advantages to an organisation—insofar as it arises through a natural, meritocratic process, which leads to the accumulation of talent drawn from many different demographics. But the “D” in DEI typically speaks to a different, ideologically constructed model of diversity—one achieved through quotas, preferential standards of advancement, language policing, and sensitivity training.
The idea that aggressive DEI policies will improve corporate performance received a boost when an elite management consultancy, McKinsey and Company, released a series of studies in 2015, 2018, and 2020, concluding that—as the title of the final report put it—Diversity Wins: “Our latest report shows not only that the business case remains robust but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.”
The message was what many people in the corporate world wanted to hear, as it seemed to pre-empt any need to balance diversity-seeking and profit-seeking mandates: Since diversity (supposedly) led directly to enhanced profits, there was no trade-off. It was all just one big win-win.
If true, that would indeed be good news. But these McKinsey reports now sit under something of a cloud—which is why so many companies are now ignoring McKinsey’s conclusions. When economists seeking to double-check McKinsey’s numbers asked to see the data, they were denied access. And insofar as those economists were able to replicate McKinsey’s analyses using publicly available corporate data, they failed to “find statistically significant relations between McKinsey’s [measured] executive racial/ethnic diversity at mid-2020 and either industry-adjusted earnings before interest and taxes margin or industry-adjusted sales growth, gross margin, return on assets, return on equity, and total shareholder return over the prior five years 2015–2019.”
“Despite the imprimatur given to McKinsey’s studies,” they concluded, these “should not be relied on to support the view that U.S. publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”
All of which to say, corporations needn’t have waited for the U.S. Supreme Court to strike down affirmative action, nor for Donald Trump’s re-election, before executing this policy shift. The best reason to reject corporate DEI programs isn’t that they offend the law or prevailing political trends—but that they simply don’t deliver the benefits that their creators once promised.
