Abandoning EDI – but why? Considering the drivers behind big US firms' apparent rollback

So, we start the New Year with major announcements that another big US tech firm is ‘cancelling EDI’. 

My first question is ‘why’? 

Creating a diverse and inclusive workplace is a major change programme. Perhaps the most ambitious embarked upon by companies and institutions of all types. It is a longitudinal project – indeed, one senior HR leader at a major UK bank remarked to me a while ago, ‘the thing is, this stuff takes 15 years to really bed-in across the organisation, but my board doesn’t want to hear that.’ 

So why cancel a project that is around half way along? (And yielding very strong results in most cases, I might add, though admittedly not overnight!)

Without being in the boardrooms making the decisions, or hearing from the employees of the companies themselves, it is hard to unpick underlying rationales. So I am left with the company statements and media reports of internal memos – these paint a mixed picture. 

Some of the stated rationale focuses on updating practice and ‘unifying employee groups’.  I recognise these needs – indeed, we have worked with major firms on re-shaping their employee representative groups to better support strategic EDI & Culture goals. I welcome evolution in EDI practice and initiatives, after all, what was right for today is rarely right for tomorrow. Plus no group should be seen as ‘untouchable’ in regard to innovation but I do note that it seems odd practice in these ‘change communications’ not to focus on the ‘new and improved’, but instead dwell on why current programmes might be outdated. Perhaps this is a media reporting issue, where a particular narrative is over emphasised? 

But what is clear to me is that EDI statements and initiatives are being ‘politicised’, and – contradictorily - that a changing ‘political and legislative landscape’ requires a different approach to internal company culture.

This is where it really starts to worry me. External stakeholders, including political ones, have a legitimate interest in how well-run your company is. Factors that support, or are indicative of, failures in compliance, ethics and ultimately economic success are of key interest to politicians, regulators, shareholders, investors and wider markets. 

EDI is not a ‘magic bullet’ on its own for a business, but it has been a strong indicator of a well-managed successful firm.

These are the reasons that a range of stakeholders are interested in board diversity and diversity and inclusion throughout the business. Well-managed diversity is linked to financial out-performance, and culture is now established as a vital element of ethical and exceptional service, which are both compliant and efficient in regard to cost and operations. A key building block to the type of business most stakeholders want to engage with. 

I personally also believe EDI is the ‘right thing to do’, and as such choose to run my business WB Directors UK in a way that supports these values. Yet, I would not and do not suggest others do purely on this basis. Here, I fear we may be witnessing a trend for firms to follow the political opinions and styles of the day – potentially wasting years of good work and weakening economies and firms alike. 

That is why I believe for 2025, it is vital we re-emphasise the business case for diversity and inclusion – how it supports innovation, staff retention, company reputation, resonance with customers and inhibits excessive risk taking and expensive compliance breaches, which in turn lead to the widely observed correlation with overall profitability and financial out-performance. 

Finally, a word to the board directors. In today’s fast-paced tech industry, the best companies are mindful it is the people inside the firms driving the tech (AI or not!) who ultimately create the real competitive advantage and business resilience - as explained eloquently by expert NED Shefaly Yogendra Ph.D in the Tech module of our Boardroom Essentials Quick course.  Neglecting them risks a range of unintended consequences, as does becoming excessively close to the political agenda as a business.

Board directors today need to step up to the important stewardship role they are charged with: keeping People and Culture at the heart of a focused, well-financed business strategy based on the evidence of what works, not the political flavour of the day.

And if you're stuck for the evidence on the business case for EDI, there's a reminder of some of the key research on our website.