At a time when many businesses are abandoning their diversity, equity, and inclusion programs, Apple and Costco are standing behind theirs.
Both are encouraging shareholders to vote against resolutions asking them to reevaluate their commitment to DEI. A shareholder resolution is a means by which those who hold stock in a company can seek to influence the company’s policies. Most are nonbinding and most do not receive a majority vote, as the bulk of shareholders usually vote among company lines. But if a resolution receives even 10 percent support, it’s hard for the company to ignore.
The Apple and Costco resolutions were both submitted by National Center for Public Policy Research, a conservative think tank. Both cite the U.S. Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard, holding that race-based affirmative action in college admissions is unconstitutional. The Apple resolution also cites the high court’s 2024 ruling in Muldrow v. City of St. Louis, which found that Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating in transfer decisions even if the transfer didn’t cause great disadvantage.
The resolutions say that DEI programs pose financial and reputational risks to companies, noting that a white employee sued Starbucks for racial discrimination and won $25 million. DEI programs vary from company to company, but their generally promote inclusive practices for groups that have historically suffered discrimination, including people of color, LGBTQ+ people, and women.
“With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of illegal discrimination because they are white, Asian, male or straight,” the resolution to the retailing giant states. “Accordingly, even if only a fraction of those employees were to file suit, and only some of those prove successful, the cost to Costco could be tens of billions of dollars.” The Apple resolution doesn’t mention those groups, but it does go into the potential cost of lawsuits.
Apple, in its proxy statement (a document sent to shareholders ahead of the annual meeting), recommends a vote against the resolution because “the proposal is unnecessary as Apple already has a well-established compliance program and the proposal inappropriately attempts to restrict Apple’s ability to manage its own ordinary business operations, people and teams, and business strategies; and our Board and management maintain active oversight of legal and regulatory risks and compliance for our global business.”
“Apple is an equal opportunity employer and does not discriminate in recruiting, hiring, training, or promoting on any basis protected by law,” the statement continues. “Apple seeks to operate in compliance with applicable non-discrimination laws, both in the United States and in the many other jurisdictions in which we operate, and in that regard monitors and evolves its practices, policies, and goals as appropriate to address compliance risks. The proposal inappropriately seeks to micromanage the Company’s programs and policies by suggesting a specific means of legal compliance.”
Apple has a supplier diversity program, set up in 1993, which works with groups such as the National Minority Supplier Development Council and National Veterans Business Development Council, CNN reports. It also has a vice president of inclusion and diversity, a position established in 2017, and 67 employee groups called diversity network associations. The first of these dates from 1986. Apple’s CEO, Tim Cook, is gay (although he did donate personal funds, not company ones, to anti-LGBTQ+ President-elect Donald Trump's inauguration).
“We are simply asking for a consideration,” Stefan Padfield, executive director of the NCPPR’s Free Enterprise Project, told CNN. “The proposal, if approved, would not automatically result in the abolishment of DEI.”
Costco’s directors, however, say this is the ultimate goal of such resolutions. “The proponent professes concern about legal and financial risks to the Company and its shareholders associated with the diversity initiatives,” the proxy statement reads. “The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the Company but abolition of diversity initiatives.”
The NCPPR published a document called “Balancing the Boardroom” in 2022, Costco notes. It said CEOs and other corporate executives who are “woke” and “hard-left” are “inimical to the Republic and its blessings of liberty” and “committed to critical race theory and the socialist foundations of woke” or “shameless monsters who are willing to sacrifice our future for their comforts.”
“Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all,” Costco’s statement says. “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. … We believe that our diversity, equity and inclusion efforts are legally appropriate, and nothing in the proposal demonstrates otherwise.”
Costco’s annual shareholder meeting will be held January 23. Apple’s will be held February 25.