Costco’s board of directors has unanimously rejected a shareholder proposal to conduct a study of the retailer’s diversity, equity and inclusion (DEI) policies, saying it reflects the anti-DEI policy bias of the National Center for Public Policy Research, the conservative think tank that proposed the study. The proposal claims that “DEI holds litigation, reputational and financial risks to the company, and therefore financial risks to the shareholders,” according to materials prepared for the next Costco shareholder’s meeting on Jan. 23, 2025.
In response, the board wrote that: “Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members and suppliers. Our efforts around diversity, equity and inclusion follow our code of ethics. For our employees, these efforts are built around inclusion — having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed. This capacity is critical because we owe our success to our now over 300,000 employees around the globe.”
Costco’s action is significant given the recent trend of companies to abandon or soft-pedal their DEI efforts, including Tractor Supply, Walmart, Target, John Deere, Harley-Davidson and Lowe’s.
The Costco board’s statement supported both the bottom-line and societal benefits of DEI programs: “Combined with our obedience to the law, service to our employees, members and suppliers has rewarded our shareholders. This is our code of ethics. Our focus on diversity, equity and inclusion is not, however, only for the sake of improved financial performance but to enhance our culture and the well-being of people whose lives we influence.”
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