Supreme Court Ruling Means Companies Must Double Down and Work Smarter Toward DEI Goals

As universities grapple with the Supreme Court’s ruling on affirmative action, businesses and investors will find themselves at an inflection point in their efforts to promote diversity, equity, and inclusion (DEI). The course they choose will have a long-term impact on the stability of their workforce and the strength of their business.

By: Michael McAfee, President and CEO of PolicyLink, and Mahlet Getachew, Managing Director of Corporate Racial Equity at PolicyLink

While the ruling will surely embolden divisive rhetoric and baseless attacks on DEI, businesses and investors that misread the Court’s decision (and rhetoric around it) as a signal to pull back on DEI will struggle to keep pace with their more equity-focused competitors. The ruling instead signals a new era for corporate DEI, one in which businesses and investors have an opportunity to deepen their efforts and work smarter.

What’s At Stake

Racial and economic inequality remain persistent across our society. At the same time, the US is set to become a majority people-of-color nation by the 2040s. As Justice Jackson stated so powerfully in her dissenting opinion: “The only way out of this morass — for all of us — is to stare at racial disparity unblinkingly, and then do what evidence and experts tell us is required to level the playing field and march forward together, collectively striving to achieve true equality for all Americans.” For businesses and investors, prioritizing DEI for the long term is the most pragmatic pathway to winning loyal customers, attracting the best talent, and having the broadest market reach — it is also the right thing to do.

Misinterpreting a ruling against affirmative action as a verdict against DEI will put businesses and investment firms at a disadvantage, and one that can have costly consequences: unfair treatment in the workplace based on race or ethnicity already costs companies billions in absenteeism, lower productivity, turnover, and discrimination claims. Conversely, the benefits of DEI have long been established — from fostering improved productivity to delivering greater value to customers and investors and providing organizations a competitive edge. It should be no surprise either that a majority of people in America believe it is important for companies to promote racial diversity and equity in the workplace. The Supreme Court’s ruling does not change these realities.

A New Era of Diversity, Equity, and Inclusion

We are, however, in a new era for corporate DEI. Navigating the current landscape may feel daunting for leaders at first, but it does not need to be. DEI is inextricably linked to the fundamentals of business and investment today: securing stable, long-term profits in an increasingly diverse society requires broadening fair opportunities for all of us, not just some of us. The purpose of DEI also remains unchanged: it is to ensure equal opportunity by tackling discrimination and exclusion and advancing fairness and inclusion. 

As 21 state attorneys general noted in their recent letter to Fortune 100 companies following the ruling, “Companies remain free to remedy historic inequities by: (a) adjusting recruiting practices, (b) developing better retention and promotion strategies, and/or (c) furthering leadership development and accountability. Companies need not don a veil of ignorance and pretend that racial inequities do not exist.” Not only are such private sector efforts legal, they say, they “play a crucial role in establishing and maintaining the societal and economic benefits of diversity.”

While every organization may be in a different place on DEI, three priorities now stand out in light of the ruling.

Proactively Protect DEI Programs and Investments

Assess your current programs and investments and seek expert guidance to protect them. Asking your legal counsel about the risks you may face following the ruling is very different from asking your legal counsel to guide you in protecting your DEI efforts. Ensure your requests for legal guidance expressly include the latter. Understanding how to effectively (and legally) use racial data for DEI is also important, as is ensuring the entire organization is clear on how DEI is a core component of business success and should be embedded in all operations and decision-making processes. Gaining internal alignment will undoubtedly involve dispelling misconceptions and combating divisive narratives around DEI. Leaders should invest the time in developing their soft skills to effectively address backlash — this is essential in protecting DEI efforts and achieving the organization’s DEI goals.

Double Down on Expanding the Talent Pipeline

Employers will also have to increase efforts to expand and fortify the talent pipeline — the area most directly affected by the ruling. Those that reassess their job requirements to better fit the modern workforce will broaden their talent pool. For example, college degrees may not be essential for success in certain roles. Casting the net wider also includes employing multiple channels for our nation’s best talent and actively de-biasing recruitment and hiring practices (including referral programs). Outreach to the workforce of the future should also begin prior to college graduation. Forward-thinking organizations will establish long-term relationships with, and provide meaningful support to, our nation’s historically black colleges and universities (HBCUs).

Deepen Collaboration with Affected Communities

Finally, employers will need to support young people of color, many of whom will have a much harder path to college. There are opportunities for businesses to play a more active role in ensuring underrepresented students have the support needed to apply to and succeed in college. They can do this by developing relationships with community-based organizations, co-creating community solutions and philanthropic gifts directly with communities, and contributing knowledge and resources to local schools and training programs.

Workplace Diversity and Equality Are Fundamental 

Our nation’s strength, including the engine of our economic power, has always been our diversity. Leveling the playing field for all workers and our next generation of leaders is more important now than ever before. “Society’s progress toward equality cannot be permanently halted,” states Justice Sotomayor in her dissent. “Diversity is now a fundamental American value, housed in our varied and multicultural American community that only continues to grow. The pursuit of racial diversity will go on.” Businesses and investors that keep sight of this, rise to the challenge, and advance fairness within their four walls and across our society will be rewarded.