Shareholder actions challenging DEI programs may gain momentum following Trump's executive order "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" that impacts affirmative action measures.
U.S. publicly-traded companies assessing their diversity initiatives face potential risks beyond federal probes. Legal experts suggest that shareholder cases could be strengthened by the recent White House decree, which directs federal agencies to pinpoint private-sector entities for civil compliance scrutiny.
Given the new executive order, some shareholders might contend that maintaining any DEI programs exposes a company to unnecessary litigation, as well as reputational and financial risks, which ultimately affects investors.
Here is the full text of President Trump's Executive Order.
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