Costco Wholesale Corporation has flatly turned down a shareholder resolution to reconsider its diversity, equity, and inclusion policies. Costco’s board of directors, in a unanimous vote, advised shareholders against the proposal from the conservative National Center for Public Policy Research. The shareholder resolution accused Costco of risking lawsuits through DEI programs, mostly for race and gender, sexual orientation, or ethnicity against whites, Asians, men, and straight people.
It has taken up its defense of DEI efforts by claiming that it has been positively impactful on employee engagement, innovation, and customer satisfaction. The board stated that DEI fosters creativity and enhances the offerings of merchandise. In response, the board claimed that the proposal was nothing but an attempt to sabotage the long-standing diversity initiatives that had been undertaken by the company under the pretext of financial risk reduction.
“Our commitment to diversity, equity, and inclusion is legally appropriate and vital to our success,” Costco’s board said in a statement. “A diverse workforce reflects the values of our members and enhances our ability to serve them effectively.”
The retailer stressed that its supplier diversity program and collaboration with the Thurgood Marshall College Fund and similar organizations form a vital part of its mission. These initiatives, according to the firm, meet not only the legal requirements but also enhance shareholder value by cultivating respect and innovation.
Whereas some firms have retreated on DEI initiatives due to increased scrutiny and lawsuits, Costco has chosen to retain its policies. The advocates of more inclusive business practices have praised Costco’s stand.
A shareholder proposal scheduled to be presented during Costco’s annual general meeting on 23 January 2024 requires eligible shareholders to vote on supporting a recommendation by the board of directors or promoting alternative alteration of company DEI directions.
The retailing company, Costco, announced its decision based on the broader debate, on whether and how diversity programs can be a part of the workforce as mounting legal and political pressure against the practice goes on.
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