Talent, Culture and Human Capital Governance
Introduction: The Evolving Human Capital Landscape
The rapid evolution of technology, regulation and workforce expectations in 2025 has fundamentally reshaped board oversight priorities. Artificial intelligence (AI) adoption, hybrid work models and shifting diversity, equity and inclusion (DEI) standards now intersect with environmental, social and governance (ESG) imperatives, requiring boards to proactively manage talent, culture and human capital risks. In addition to driving performance and resilience, boards must increasingly view human capital governance as a key risk management function, with failures in oversight exposing companies to heightened scrutiny from regulators, enforcement agencies and other government stakeholders. Given the current regulatory and political environment, boards should expect that human capital disclosures may be selectively reframed by activists, litigants or policymakers to advance campaigns, compel information production or allege misalignment between stated commitments and day to day operational realities.
Technology’s Transformative Impact: AI and Hybrid Work
Artificial Intelligence
AI is no longer optional; it is fundamentally reshaping business operations and workforce dynamics at every level.1 In 2025, 72% of S&P 500 companies disclosed at least one material AI risk in their 10-Ks, up from just 12% in 2023.2 AI adoption is also reshaping organizational structures and decision-making processes. According to Gallup, in 2025 the share of U.S. employees using AI in their jobs has nearly doubled over the past two years, rising from 21% to 40%, with frequent usage also showing a similar increase.3 As routine tasks and some managerial functions are automated, boards should guide management in reallocating responsibilities to focus on higher-value work.4 Beyond guiding management on workforce realignment, boards should also ensure that appropriate AI governance and oversight structures are in place, including clear lines of management accountability, regular reporting to the board and documented risk assessments addressing reliability, bias, data protection and regulatory compliance. Boards should require periodic updates on how AI tools are being deployed across the organization and how related risks are identified, monitored and mitigated.
Regulation of AI is evolving rapidly, with the European Union (EU) and the United States each charting distinct paths. The EU’s AI Act5 establishes the world’s first comprehensive, risk-based legal framework for AI, imposing detailed obligations on providers and users of high-risk and general-purpose AI systems.6 Entered into force on August 1, 2024, with full applicability 24 months after its implementation date, the AI Act introduces a risk-based approach, categorizing AI systems into four levels: (i) unacceptable risk (prohibited practices such as manipulative AI social scoring and biometric surveillance), (ii) high risk (strict obligations for AI in critical infrastructure, education, employment and law enforcement), (iii) transparency risk (disclosure requirements for generative AI and deep fakes) and (iv) minimal or no risk (no new rules for low-risk applications). These rules require robust risk assessments, transparency and human oversight.
In contrast, the Trump administration has advanced an innovation‑first, deregulatory approach that prioritizes national competitiveness, federal preemption of more restrictive state laws and the rollback of prior federal AI oversight initiatives. Executive orders (EO) in 2025, including “Removing Barriers to American Leadership in Artificial Intelligence”7 and “Ensuring a National Policy Framework for Artificial Intelligence”8 , revoke Biden-era directives such as the 2023 EO “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,”9 and direct agencies to rescind or revise policies perceived as impeding innovation. These measures instruct federal agencies to challenge state AI regimes10 inconsistent with a unified national framework and embed America’s AI Action Plan and new advisory structures in federal policy, emphasizing U.S. “global AI dominance”11 through infrastructure investment and the promotion of “ideologically neutral”12 AI systems, rather than detailed, use‑case‑specific constraints comparable to the EU’s AI Act.
U.S. companies operating internationally must confirm that their AI strategies can meet the prescriptive standards of the EU while adapting to less uniform, rapidly shifting U.S. norms. This demands robust internal controls around data governance, bias mitigation and transparency, as well as proactive engagement with legal counsel to monitor regulatory developments and maintain compliance across jurisdictions. In this environment, strategic oversight and adaptability are essential for effective AI governance.
Practical Strategies for Board Governance of AI Issues
- Assess Role Evolution: AI is eliminating traditional entry-level tasks and introducing specialized roles (e.g., AI data scientists, ethics officers). Boards should verify that talent strategies and organizational structures reflect these shifts.
- Upskill and Reskill: Prioritize continuous training on AI fundamentals, role-specific applications and output validation.
- Strengthen Governance: Regulations governing AI are evolving rapidly at both state and federal levels, so boards should implement oversight frameworks to address reliability, bias and privacy risks. Regularly consult legal counsel to update policies as laws change.
- Ethics and Compliance: Implement protocols to detect and correct AI bias (stemming from its programmers, the data inputted into AI systems and the algorithms used) and “hallucinations” (false or misleading outputs), and review compliance with changing regulations.
- Data Privacy: Prohibit use of public AI platforms for sensitive information; mandate secure, company-approved solutions.
- Monitor and Audit: Use regular audits and employee surveys to identify gaps in AI training and process improvement opportunities.
Hybrid Work
The widespread adoption of hybrid and remote work models has fundamentally reshaped workforce dynamics and introduced new complexities for boards of directors. Flexible arrangements have become a competitive necessity, with Gallup’s 2025 hybrid-work indicator reporting that roughly six in ten remote-capable employees would be extremely or very likely to seek new employment if their organization eliminated remote-work flexibility, underscoring the retention risk of rigid return-to-office mandates.13 At the same time, fully on-site roles continue to decline as hybrid arrangements expand. According to Robert Half International, hybrid positions accounted for approximately 24% of new job postings by Q2 2025, up from 15% in Q2 2023, with 88% of surveyed employers providing some hybrid work options.14
While flexible arrangements have become a competitive necessity, they also present challenges for maintaining culture, productivity and employee engagement. Boards must ensure that remote and hybrid work policies comply with a complex array of federal, state and local laws, including wage‑and‑hour requirements under the Fair Labor Standards Act (FLSA)15, anti‑discrimination and accommodation obligations under Title VII16 and the Americans with Disabilities Act (ADA)17 , as well as, where applicable, collective bargaining obligations under the National Labor Relations Act (NLRA).18 Remote employees are generally entitled to the same wage, overtime, anti-discrimination and leave protections under federal and state law as in-office workers.
The compliance landscape is further complicated by a growing patchwork of U.S. state privacy laws. For example, California’s Consumer Privacy Act (CCPA)19 amendments brought job applicant, employee, and contractor data fully within the scope of the CCPA as of January 1, 2023, and subsequent 2025 regulations extended that framework through new HR-focused risk-assessment obligations effective January 1, 2026. Other comprehensive state privacy statutes (see, e.g., Colorado and Connecticut, among others) have not removed their general carve-outs for employment data, so employee and applicant data in those states remain largely outside the core “consumer” privacy regimes, though sector-specific and workplace privacy rules still apply. Additional state laws, including Colorado’s 2024 Biometric Identifiers & Data amendment to the Colorado Privacy Act20 and Illinois’ Biometric Information Privacy Act (BIPA)21, impose requirements on data management and monitoring practices, which may affect how organizations monitor remote workers’ devices, online activity, timekeeping, identity verification and productivity. Industry-specific regulations like Health Insurance Portability and Accountability Act (HIPAA)22 and for multinational organizations, the EU’s General Data Protection Regulation (GDPR),23 which, unlike U.S. law, imposes strict limits on employee monitoring and cross-border data transfers, further complicate compliance.
Boards must also maintain careful oversight of employee monitoring, cross-border data transfers and recordkeeping practices in hybrid work environments. The U.S. Securities and Exchange Commission (SEC) has intensified its enforcement efforts in the remote work era, leveraging advanced data analytics to detect insider trading and recordkeeping violations, including cases where material nonpublic information (MNPI) was accessed or discussed in home environments.24 Recent actions under the Securities Exchange Act of 1934 (as amended, the Exchange Act) Rule 17a-4(b)(4) and the Investment Advisers Act of 1940’s recordkeeping requirements highlight that broker‑dealers and registered investment advisers must maintain and preserve business‑related communications across personal devices and off‑channel platforms. Management should also maintain robust policies, controls and training to safeguard MNPI, govern use of personal devices and collaboration tools and comply with recordkeeping and surveillance obligations, recognizing that failure to adapt compliance programs to hybrid work can result in significant financial penalties, reputational damage and enhanced regulatory scrutiny.
Policies should be structured and administered to avoid unlawful disparate impact on protected groups, with criteria for remote-work eligibility, exceptions and return-to-office expectations documented and applied consistently to mitigate litigation and regulatory risk.
Pushback on Diversity, Equity and Inclusion (DEI) Initiatives
DEI is a rapidly changing area of the law and a highly politicized issue. Heightened public attention to social justice issues following the killing of George Floyd in 2020 prompted many companies to make public DEI commitments and roll out new initiatives focused on workplace fairness. However, recent legal and political developments have fundamentally altered how DEI initiatives are evaluated and implemented. In parallel with regulatory developments, shareholder activists have increasingly viewed DEI and human capital disclosures as tools for influence rather than stand-alone governance efforts. Activists have focused on identifying disconnects between public commitments and internal practices, using those gaps to press litigation claims, advance books and records demands, or support proxy and reputational campaigns. In this environment, DEI related decisions are often evaluated not only for legal compliance, but also for how they may be framed or repurposed by adversarial stakeholders.
Legal and Regulatory Shifts
The 2023 Supreme Court decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (SFFA)25 ended affirmative action in higher‑education admissions and emboldened challenges to corporate DEI programs. In January 2025, the administration’s EOs (including “Ending Illegal Discrimination and Restoring Merit‑Based Opportunity”26) directed federal agencies to investigate and pursue enforcement actions against “illegeal DEI” practices in the private sector, increasing regulatory scrutiny.27 On March 26, 2026, President Trump issued an EO requiring agencies to incorporate a new contract clause restricting certain race based DEI activities in federal contracts and subcontracting relationships.28 Unlike prior actions, the Order embeds DEI requirements directly into contractual obligations.
Following SFFA and directives from the Trump administration, a growing number of public companies have faced shareholder demands and legal challenges targeting race-based hiring goals and affinity groups.29 Companies have also faced lawsuits alleging reverse discrimination, regulatory inquiries into hiring and promotion practices and activist shareholder proposals demanding greater transparency or changes to DEI disclosures.30 For example, Target has faced shareholder class actions alleging disclosure failures and reverse‑discrimination‑linked risk, allegations which are illustrative of the reputational and legal exposure companies face when public DEI commitments collide with polarized stakeholder reactions.31 Federal enforcement has also shifted. At the same time, several high‑profile challenges have been dismissed, signaling that courts will scrutinize standing theories and generalized allegations of “reverse discrimination” or disclosure harm and may reject them absent specific, non‑speculative injury.32
The EEOC has increasingly emphasized “DEI‑related discrimination,” pursuing investigations and subpoena enforcement actions, such as its 2025 matter involving Northwestern Mutual which focused on whether promotion, fellowship or leadership programs framed as DEI initiatives unlawfully disadvantage non‑preferred groups.33 Challenges to the EEOC’s DEI‑related information requests have, however, resulted in clarifications regarding the limits of those efforts, including a 2026 stipulation of dismissal in Doe 1 v. EEOC34 confirming that responses to the agency’s 2025 letters to large law firms were voluntary and that those requests are now closed. Notwithstanding increased scrutiny, some companies, including Delta35 and Ben & Jerry’s36 , have elected to defend their DEI programs and related disclosures rather than retreat. In several instances, companies have successfully resisted efforts to characterize workforce initiatives as per se unlawful, underscoring that carefully designed programs may withstand challenge even in a more adversarial enforcement environment.
Board Leadership in a Changing Landscape
Boards must now operate in an environment where both regulatory scrutiny and stakeholder expectations are at an all-time high, with recent enforcement trends focusing not just on written policies, but on actual outcomes such as promotion rates, pay equity and the use of demographic data in hiring. Recent shareholder litigation against Target37 and Starbucks38 has highlighted the risks of misalignment between public DEI commitments and actual workforce outcomes. For example, in the Starbucks matters, allegations targeting race‑based initiatives were framed not only as employment‑law violations, but also as evidence of governance failures and misleading public disclosures—illustrating how shareholder activists and state officials have leveraged DEI programs as vehicles for broader legal and reputational challenges. Recent decisions, however, underscore that anti-DEI challenges are not uniformly prevailing. Starbucks recently secured dismissal of the Missouri Attorney General’s lawsuit challenging its DEI initiatives, with the court emphasizing Missouri’s failure to identify even a single state resident who suffered a concrete, particularized injury and describing the alleged consumer and labor‑market harms as speculative and conclusory.39 At the same time, SEC enforcement actions in 2024-2025 have targeted misleading diversity and AI disclosures.40
The Conference Board reports that 53% of S&P 100 companies adjusted their DEI messaging in major filings in 2025, while disclosure of workforce and board diversity metrics declined across the S&P 500 from 2024 to 2025, reflecting a broader shift toward more cautious and selective public reporting.41 Reflecting this broader recalibration, the Human Rights Campaign’s 2026 Corporate Equality Index reported a 65% decline in Fortune 500 participation year‑over‑year, from 377 companies in 2025 to 131 in 2026 and noted that many of the companies that chose not to participate are federal contractors.42 Notably, companies such as Costco and Apple have chosen to defend, rather than dismantle, their DEI programs—publicly recommending votes against anti‑DEI shareholder proposals and maintaining DEI‑focused disclosures in their proxy and other investor materials.43
Meanwhile, the Fifth Circuit’s December 11, 2024, en banc decision vacated the Nasdaq Diversity Rule, eliminating exchange‑level enforceability but leaving investor and proxy advisor expectations intact.44 Despite the removal of the formal listing requirement, board diversity disclosure has become a standard practice among public companies, including those not listed on Nasdaq. Many organizations are likely to continue to voluntarily report board diversity data to meet investor expectations.45 This shift provides companies with greater flexibility in how they present diversity information, including discretion over definitions, format, placement and timing, allowing disclosures to be tailored to company‑specific circumstances while remaining responsive to stakeholder priorities.
Glass Lewis continues to consider board diversity in its U.S. Benchmark Policy (e.g., generally recommending against the nominating‑committee chair at Russell 3000 companies with less than 30% gender diversity, or against the chair where Russell 1000 boards have fewer than one director from an underrepresented community), while adding a “For Your Attention” flag to help investors who may wish to vote “for” despite a diversity‑related “against” recommendation.46 Institutional Shareholder Services (ISS), by contrast, announced in 2025 that it would indefinitely halt consideration of gender/racial/ethnic diversity factors in its U.S. director voting recommendations (effective for reports published on or after February 25, 2025), citing recent EOs and heightened scrutiny.47 Beyond diversity matters, proxy advisors continue to evaluate board skills and independence, responsiveness to shareholder votes, oversight of emerging risks such as AI and cybersecurity and alignment between executive pay and performance when formulating voting recommendations.48 Similar dynamics are beginning to emerge in the climate context.49 Recent challenges involving Costco’s climate action initiatives, including allegations of “greenwashing” and calls for SEC review of the company’s handling of associated shareholder proposals, illustrate how climate related commitments, like DEI programs, can become focal points for shareholder proposals, regulatory engagement and reputational scrutiny, highlighting that public sustainability commitments may attract attention from a range of stakeholders with differing objectives.50
The practical implication is to treat ESG and climate communications as core risk‑management disclosures: anchor claims in verifiable data, avoid aspirational language that outpaces internal controls or execution capacity, and ensure consistent treatment across SEC filings, sustainability reports and other public statements. In parallel, Boards should monitor these shifts, align disclosures with current legal and stewardship expectations, and document the processes used to recruit, evaluate and refresh the board. In practice, many large‑cap boards have responded by updating their diversity matrices and supplementing those tables with narrative discussion of board refreshment, director skills and succession planning to demonstrate alignment between board composition, strategy and risk oversight.51
Practical Strategies for Board Governance
- Regularly review DEI disclosures for consistency with actual workforce outcomes, including promotion rates, pay equity and complaint handling. Treat politically charged topics as strategic board‑level matters, rather than reacting piecemeal, to keep policies durable and principled over time.
- Document the processes used to recruit, evaluate and refresh the board, supplementing diversity matrices with narrative context about board refreshment and skills alignment.
- Consider quarterly dashboards tracking retention, engagement, development and participation in leadership programs.
- Move from quota-based diversity goals to broader “inclusive hiring” frameworks, emphasizing outreach, mentorship and unbiased selection processes.
Overpromising on DEI can lead to legal action, while underdelivering risks reputational damage and loss of talent. Recent trends show scrutiny of both the wording of disclosures and the results companies achieve—contributing to the move away from generic DEI claims toward more carefully‑framed human‑capital and culture narratives in SEC filings.52 Although DEI initiatives are under heightened scrutiny, efforts to promote fairness and opportunity continue to help companies attract and retain skilled talent while fostering cohesive, high‑performing cultures. To mitigate these risks, companies should set realistic, data‑driven objectives supported by measurable accountability frameworks.
Done well, strong human capital governance can be a shareholder‑support asset. Boards can use clear oversight structures, credible metrics and disciplined disclosures to (i) demonstrate responsiveness to investor expectations, (ii) build goodwill with long‑term shareholders before a challenge arises and (iii) reduce the oxygen available for campaigns premised on alleged misalignment or weak oversight.
1 See The White House, America’s AI Action Plan (July 2025), https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf (the Trump Administration has a demonstrated focus on supporting AI innovation in both the federal government and the private sector, including by funding workforce trainings, apprenticeships and other federally supported skills initiatives); U.S. Office of Personnel Management, OPM Launches US Tech Force to Implement President Trump’s Vision for Technology Leadership (Dec. 15, 2025), https://www.opm.gov/news/news-releases/opm-launches-us-tech-force-to-implement-president-trumps-vision-for-technology-leadership/ (announcing the creation of the United States Tech Force to implement the President’s AI Action Plan).
2 Matteo Tonello, AI Risk Disclosures in the S&P 500: Reputation, Cybersecurity, and Regulation, Harvard L. Sch. F. on Corp. Gov. (Oct. 15, 2025), https://corpgov.law.harvard.edu/2025/10/15/ai-risk-disclosures-in-the-sp-500-reputation-cybersecurity-and-regulation/.
3 Ryan Pendell, AI Use at Work Has Nearly Doubled I Two Years, Gallup (June 15, 2025), https://www.gallup.com/workplace/691643/work-nearly-doubled-two-years.aspx (frequent use rose from 11% to 19%).
4 Nela Richardson, Yes, AI is affecting employment. Here’s the data., ADP Research (Aug. 26, 2025), http://adpresearch.com/yes-ai-is-affecting-employment-heres-the-data/.
5 Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonized rules on artificial intelligence (Artificial Intelligence Act), 2024 O.J. (L 1689).
6 Id. at 1 (comprehensive regulation of artificial intelligence in the European Union, placing risk and technology-based requirements on organizations that utilize AI, and high fines for non-compliance).
7 Exec. Order No. 14365, Ensuring a National Policy Framework for Artificial Intelligence, 90 Fed. Reg. 58499 (Dec. 11, 2025) (mandating a federal approach to AI, in part by requiring federal agencies to challenge state laws regulating AI).
8 Exec. Order No. 14179, Removing Barriers to American Leadership in Artificial Intelligence, 90 Fed. Reg. 8741 (Jan. 23, 2025) (revoking AI policies that block American AI innovation and requiring review of all actions taken pursuant to revoked EO 14110 of Oct. 30, 2023, Safe, Secure and Trustworthy Development and Use of Artificial Intelligence).
9 Exec. Order No. 14110, Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, 88 Fed. Reg. 75191 (Oct. 30, 2023) (“[E]nsure[s] the development of safe, secure and trustworthy AI systems[.]”).
10 States have started advancing their own AI regulatory frameworks. Colorado’s Artificial Intelligence Act (SB 24‑205) creates a comprehensive, risk‑based regime for “high‑risk” AI systems used in consequential decision‑making (e.g., employment, credit, housing, education and healthcare), imposing governance, transparency and impact‑assessment requirements on developers and deployers. However, in August 2025, the state postponed the law’s implementation to June 30, 2026, following unresolved concerns about compliance costs, underscoring the evolving nature of state‑level AI regulation. See Akin, Colorado Postpones Implementation of Colorado AI Act, SB 24-205 (Sept. 22, 2025), https://www.akingump.com/en/insights/ai-law-and-regulation-tracker/colorado-postpones-implementation-of-colorado-ai-act-sb-24-205. Illinois has taken a similar approach by amending its Human Rights Act through HB 3773 to regulate the use of AI in employment decisions. The amendment, effective January 1, 2026, prohibits the use of AI based tools in hiring, promotion, discipline, or other employment actions without employee notice, or in ways that result in discrimination based on protected characteristics, including the use of zip code as a proxy, with further guidance on notice and enforcement anticipated. At the same time, EO 14365, Ensuring a National Policy Framework for Artificial Intelligence, directs federal agencies to identify and seek to preempt state AI laws viewed as overly burdensome—including certain provisions of Colorado’s statute—underscoring the unsettled and multi layered nature of the U.S. AI regulations.
11 Ensuring a National Policy Framework for Artificial Intelligence, supra note 7.
12 The White House, Fact Sheet: President Donald J. Trump Prevents Woke AI in the Federal Government (July 23, 2025), https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-prevents-woke-ai-in-the-federal-government/.
13 Gallup’s 2025 hybrid‑work indicator reports that roughly six in ten remote‑capable employees would be extremely or very likely to look for a new job if their employer eliminated remote‑work flexibility, underscoring the retention risk of rigid return‑to‑office mandates. Hybrid Work Indicators, Gallup https://www.gallup.com/401384/indicator-hybrid-work.aspx#:~:text=Half%20of%20U.S.%20Remote%2DCapable,Work%20%E2%80%94%20Even%20More%20Prefer%20It&text=Line%20graph%20showing%20current%2C%20expected,prefer%20to%20work%20on%2Dsite.&text=Dates%20that%20appear%20when%20hovering,time%2C%20remote%2Dcapable%20employees (last visited Dec. 10, 2025).
14 Katie Merritt, Remote Work Statistics and Trends for 2025, Robert Half (Nov. 13, 2025), https://www.roberthalf.com/us/en/insights/research/remote-work-statistics-and-trends (based on survey of more than 500 U.S. companies).
15 29 U.S.C. §§ 201-219.
16 42 U.S.C. § 2000e et seq.
17 42 U.S.C. § 12101 et seq.
18 29 U.S.C. § 157.
19 Cal Civ Code § 1798.100 et seq.
20 HB24-1130 Privacy of Biometric Identifiers & Data (approved 2024, effective July 1, 2025), https://leg.colorado.gov/bills/hb24-1130.
21 Pub. Act 103-0769 (Aug. 2, 2024), https://www.ilga.gov/Legislation/publicacts/view/103-0769.
22 42 U.S.C. §§ 1320d et seq.
23 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the Protection of Natural Persons with Regard to the Processing of Personal Data and on the Free Movement of Such Data, 2016 O.J. (L 679)
24 See, e.g., Press Release, U.S. Sec. & Exch. Comm’n, Twenty-Six Firms to Pay More Than $390 Million Combined to Settle SEC’s Charges for Widespread Recordkeeping Failures (Aug. 14, 2025), https://www.sec.gov/newsroom/press-releases/2024-98; Press Release, U.S. Sec. & Exch. Comm’n, Twelve Firms to Pay More Than $63 Million Combined to Settle SEC’s Charges for Recordkeeping Failures (Jan. 13, 2025), https://www.sec.gov/newsroom/press-releases/2025-6.
25 600 U.S. 181 (2023).
26 Exec. Order No. 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, 90 Fed. Reg. 8633 (Jan. 21, 2025).
27 See The White House, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/ending-illegal-discrimination-and-restoring-merit-based-opportunity/ (“In the private sector, many corporations and universities use DEI as an excuse for biased and unlawful employment practices and illegal admissions preferences, ignoring the fact that DEI’s foundational rhetoric and ideas foster intergroup hostility and authoritarianism. Billions of dollars are spent annually on DEI, but rather than reducing bias and promoting inclusion, DEI creates and then amplifies prejudicial hostility and exacerbates interpersonal conflict.”); Department of Justice Civil Division, Civil Division Enforcement Priorities (June 11, 2025), https://www.justice.gov/civil/media/1404046/dl?inline.
28 See The White House, Addressing DEI Discrimination by Federal Contractors (Mar. 26, 2026), https://www.whitehouse.gov/presidential-actions/2025/01/ending-illegal-discrimination-and-restoring-merit-based-opportunity/; The White House, Fact Sheet: President Donald J. Trump Addresses DEI Discrimination by Federal Contractors (Mar. 26, 2026), https://www.whitehouse.gov/fact-sheets/2026/03/fact-sheet-president-donald-j-trump-addresses-dei-discrimination-by-federal-contractors/.
29 See, e.g., AnnaMaria Andriotis & Alexander Saeedy, Anti-DEI Activists Target Goldman Sachs and JPMorgan Chase, The Wall Street Journal (Jan. 22, 2025), https://www.wsj.com/finance/banking/dei-banking-finance-goldman-sachs-jp-morgan-257a17c7?gaa_at=eafs&gaa_n=AWEtsqfn920VUAtztaSEmLk0kbRJoH_gCBoZWlvNJmyKtVt8feRCFef84q7r&gaa_ts=69418cae&gaa_sig=rHrnHDWplAycQfU9dkgKPBjbaaLeDEFA6Nbi-uJmdfFa7jbIMcTy3zlPt8OpIWMFNwY-WFq8W1ADbJ0GR1ZgNQ%3D%3D; Theo Francis & Sarah Nassauer, ‘Anti-Woke’ Shareholders Are Going After Corporate Boards, The Wall Street Journal (June 11, 2024), https://www.wsj.com/business/anti-woke-shareholders-are-going-after-corporate-boards-5dc08fa5?mod=article_inline.
30 U.S. Equal Employment Opportunity Commission, EEOC Sues Apple for Religious Discrimination and Retaliation (Sept. 30, 2025), https://www.eeoc.gov/newsroom/eeoc-sues-apple-religious-discrimination-and-retaliation (federal lawsuit alleging Apple failed to accommodate an employee’s Jewish faith and fired him as retaliation for complaining of religious-based discrimination); U.S. Equal Employment Opportunity Commission, EEOC Files Subpoena Enforcement Action Against Financial Services Giant Northwestern Mutual Over Allegations of DEI-Related Discrimination (Nov. 20, 2025), https://www.eeoc.gov/newsroom/eeoc-files-subpoena-enforcement-action-against-financial-services-giant-northwestern (EEOC investigation into Northwestern Mutual’s diversity, equity and inclusion practices, specifically related to promotions); National Center for Public Policy Research, Cisco’s DEI Under Scrutiny—Shareholders Insist on Measurable Returns (Dec. 11, 2025), https://nationalcenter.org/ncppr/2025/12/11/ciscos-dei-under-scrutiny-shareholders-insist-on-measurable-returns/ (shareholder activists demanding information from Cisco as to whether DEI programs create financial value for shareholders or instead create unnecessary litigation risk).
31 Ohio Attorney General Dave Yost, Yost Seeks to Lead Lawsuit Claiming Target Cost Investors Billions (April 2, 2025), https://www.ohioattorneygeneral.gov/Media/News-Releases/April-2025/Yost-Seeks-to-Lead-Lawsuit-Claiming-Target-Cost-In (lawsuit in Ohio alleging Target inflated its stock value by hiding the risks of social-activism initiatives, causing investors to lose billions of dollars); Jonathan Stempel, Target sued by Florida for defrauding shareholders about DEI, Reuters (Feb. 20, 2025), https://www.reuters.com/legal/target-sued-by-florida-defrauding-shareholders-about-dei-2025-02-20/ (lawsuit filed by the State Board of Administration of Florida, alleging Target made false statements in financial reports and proxy statements about its DEI and ESG policies).
32 See, e.g., Order, Nat’l Ctr. for Pub. Policy Research v. Schultz, No. 2:22‑cv‑00267 (E.D. Wash. Sept. 11, 2023) https://law.justia.com/cases/federal/district-courts/washington/waedce/2:2022cv00267/101253/35/ (dismissing a shareholder derivative challenge to Starbucks’ diversity policies, holding that the plaintiff did not fairly and adequately represent Starbucks’ shareholders and emphasizing that courts should not interfere with reasonable and legal decisions made by corporate boards under the business judgment rule); Order, Correll v. Amazon.Com, Inc., No. 3:21-cv-01833 (S.D. Cal. Oct. 6, 2022), https://law.justia.com/cases/federal/district-courts/california/casdce/3:2021cv01833/720088/17/ (dismissing challenge to an Amazon program intended to benefit minority‑owned businesses for lack of standing where the plaintiff failed to allege that he was ready and able to take advantage of the program). Cf. Mem. Opinion & Order, Freedom Network USA v. Trump, No. 25-C-12419 (N.D. Ill. Mar. 23, 2026), https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2025cv12419/487910/88/0.pdf?ts=1774367678 (enjoining portions of executive‑order‑based grant conditions restricting DEI‑related activities); Joint Stipulation to Dismiss Appeal, American Federation of Teachers v. U.S. Department of Education, No. 25-2228 (4th Cir. Jan. 21, 2026), https://democracyforward.org/wp-content/uploads/2026/01/Joint-Stip-to-Dismiss-Appeal-25-2228-AFT-v-ED.pdf (leaving in place the district court’s vacatur of the Department of Education’s February 14, 2025 “Dear Colleague” letter as unlawful under the APA).
33 Press Release, U.S. Equal Employment Opportunity Commission, EEOC Files Subpoena Enforcement Action Against Financial Services Giant Northwestern Mutual Over Allegations of DEI-Related Discrimination (Nov. 20 2025), https://www.eeoc.gov/newsroom/eeoc-files-subpoena-enforcement-action-against-financial-services-giant-northwestern.
34 Stipulation of Dismissal at 1–3, Doe 1 v. EEOC, No. 1:25‑cv‑01124 (D.D.C. Feb. 9, 2026), https://democracyforward.org/wp-content/uploads/2026/02/Ed-v.-EEOC-Estipulation-of-Dismissal.pdf.
35 In 2025, Delta’s chief external affairs officer publicly reiterated that “DEI is about talent” and that Delta remained “steadfast” in its DEI commitment because it views those efforts as “critical to our business.” CorEy Townsend, Delta Airlines Doubles Dwon on Commitment to DEI Initiatives, HuffPost (Feb. 6, 2025), https://www.huffpost.com/entry/delta-airlines-dei_n_67a50420e4b051682f2ac1c7; see also Diversity, Equity, & Inclusion - Lifting As We Climb, Delta, https://www.delta.com/us/en/about-delta/diversity (last visited Mar. 26, 2026) (“Thoughtful action combined with a focus on championing diversity, equity and inclusion in the workplace and within our personal lives will play a healing role to help us keep climbing.” (Chief Executive Officer, Ed Bastian)).
36 Ben & Jerry’s independent board and related foundation challenged parent‑company actions they allege could undermine governance structures designed to protect the company’s social‑mission and equity commitments. See Verified Complaint, Complaint, Ben & Jerry’s Homemade, Inc. v. Unilever PLC, No. 2:24‑cv‑08641 (S.D.N.Y. Nov. 13, 2024), https://htv-prod-media.s3.amazonaws.com/files/1-67373afca0b7f.pdf; Order, Ben & Jerry’s Homemade, Inc. v. Unilever PLC, No. 2:24‑cv‑08641 (S.D.N.Y. Mar. 19, 2026) (granting Ben & Jerry’s Foundation, Inc’s request to intervene); see also What’s New, Ben & Jerry’s, https://www.benjerry.com/whats-new/2024/06/diversity-equity-inclusion (last visited Mar. 25, 2026) (“We believe creating a more just and equitable society requires an acknowledgment of the truth… We call on other companies and institutions to prioritize this important work and not be intimidated or bullied by lawmakers and others who seek to ban policies and programs to advance the causes of racial and social justice.”).
37 See, e.g., Jonathan Stempel, Target Sued by Florida for Defrauding Shareholders About DEI, Reuters (Feb. 20, 2025), https://www.reuters.com/legal/target-sued-by-florida-defrauding-shareholders-about-dei-2025-02-20/ (lawsuit filed by the State Board of Administration of Florida, alleging Target made false statements in financial reports and proxy statements about its DEI and ESG policies).
38 See, e.g., Office of the Florida Attorney General, Attorney General James Uthmeier Sues Starbucks for Illegal Race-Based Quota Policies (Dec. 10, 2025), https://www.myfloridalegal.com/newsrelease/attorney-general-james-uthmeier-sues-starbucks-illegal-race-based-quota-policies (lawsuit filed by Florida’s Attorney General alleging that Starbucks used DEI as an excuse to implement illegal race-based policies, such as race-based hiring quotas); Office of the Missouri Attorney General, Attorney General Bailey Files Suit Against Starbucks for Race-and-Sex Based Discrimination (Feb. 11, 2025), https://ago.mo.gov/attorney-general-bailey-files-suit-against-starbucks-for-race-and-sex-based-discrimination/ (“With Starbucks’ discriminatory patterns, practices, and policies, Missouri’s consumers are required to pay higher prices and wait longer for goods and services that could be provided for less had Starbucks employed the most qualified workers, regardless of their race, color, sex, or national origin.”).
39 Memo. & Order, Missouri v. Starbucks Corp., No. 4:25-cv-00165-JAR (E.D. Mo. Feb. 5, 2026), https://storage.courtlistener.com/recap/gov.uscourts.moed.217942/gov.uscourts.moed.217942.40.0.pdf.
40 See, e.g., U.S. Sec. & Exch. Comm’n, SEC Charges Founder and Former CEO of Artificial Intelligence Startup with Misleading Investors, (Apr. 11, 2025) https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282 (charging the CEO of Nate, Inc. for allegedly making materially false and misleading statements to investors regarding the company’s AI capabilities); U.S. Sec. & Exch. Comm’n, SEC Charges PGI Global Founder with $198 Million Crypto Asset and Foreign Exchange Fraud Scheme (Apr. 22, 2025) https://www.sec.gov/newsroom/press-releases/2025-69 (charging the founder of PGI Global, in part, for allegedly making false statements to investors regarding AI usage capabilities to trade crypto assets).
41 The Conference Board, Report: Big US Companies Are Disclosing Less of Their Work in DEI… But That Doesn’t Mean They’re Abandoning DEI (Aug. 4, 2025), https://www.conference-board.org/press/corporate-diversity-disclosure-2025.
42 Jared Todd, New HRC Foundation Research Underscores Strength and Strain of Moment on LGBTQ+ Workers & Future Liability to Companies, Human Rights Campaign (Feb. 4, 2026), https://www.hrc.org/press-releases/new-hrc-foundation-research-underscores-strength-and-strain-of-moment-on-lgbtq-workers-future-liability-to-companies.
43 At its annual meeting, Apple shareholders overwhelmingly (approximately 97%) rejected a proposal requesting that the company discontinue its DEI initiatives. Apple, Form 8-K (Feb. 25, 2025), https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/38005b67-8bba-4502-99b3-9f4f2fec36f3.pdf. At Costco, the board unanimously opposed a shareholder proposal that would have required the company to assess and publicly report on potential risks associated with its diversity and inclusion programs. Costco, Notice of Annual Meeting of Shareholders (Dec. 11, 2024), https://s201.q4cdn.com/287523651/files/doc_financials/2024/ar/FY24-Proxy-Statement.pdf.
44 See Alliance for Fair Board Recruitment; National Center for Public Policy Research v. SEC, 125 F.4th 159 (5th Cir. 2024).
45 The Conference Board, Report: At Big Companies, Board Diversity Disclosure Falls by Over 30% (Nov. 17, 2025), https://www.conference-board.org/press/board-composition-2025 (reporting that 66% of S&P 500 companies reported director race and ethnicity data in public disclosures in 2025).
46 See Glass, Lewis & Co. LLC, 2026 Benchmark Policy Guidelines – United States (Dec. 2025), available at https://hs-7114621.f.hubspotemail.net/hubfs/7114621/2026%20Guidelines/Benchmark/Benchmark%20Policy%20Guidelines%202026%20-%20United%20States.pdf?utm_campaign=16764527-Season%20Previews%20%26%20Reviews%202025&utm_medium=email&_hsenc=p2ANqtz-84HU-GDN0dO9YjEPp1GQyiNmSawvYJO_2Sc5Mx0L0jhAh0QHtW-WN_T6E32Dq-NY13u37w1e7EqIhjfXCrHli9gFSSMw&_hsmi=392969377&utm_content=392969377&utm_source=hs_email. Glass Lewis continues to follow its supplemental statement on diversity considerations for U.S. companies, issued on March 10, 2025. In its Supplemental Statement, Glass Lewis stated that “[w]e continue to believe that diversity contributes to improved company performance and long-term shareholder value . . . [however], we recognize that the current environment in the US is leading companies to assess the risks of maintaining their diversity programs, including their efforts to diversify their boards.”; Glass, Lewis & Co. LLC, 2025 Supplemental Statement on Diversity Considerations at U.S. Companies (Mar. 2025), https://resources.glasslewis.com/hubfs/Supplementary%20Guidance/2025%20Supplemental%20Statement%20on%20Diversity%20Consideration%20at%20US%20Companies.pdf.
47 See ISS, Proxy Voting Guidelines Benchmark Policy Changes for 2025: U.S., Canada, and Americas Regional (Dec. 17, 2024), https://www.issgovernance.com/file/policy/active/updates/Americas-Policy-Updates.pdf?v=2024.12.1; ISS, Statement Regarding Consideration of Diversity Factors in U.S. Director Election Assessments (Feb. 11, 2025), https://insights.issgovernance.com/posts/statement-regarding-consideration-of-diversity-factors-in-u-s-director-election-assessments/; Akin Gump, ISS Indefinitely Halts Consideration of Diversity Factors When Making Proxy Voting Recommendations (Feb. 13, 2025), https://www.akingump.com/en/insights/alerts/iss-indefinitely-halts-consideration-of-diversity-factors-when-making-proxy-voting-recommendations.
48 See Akin Gump, ISS and Glass Lewis Publish 2026 Benchmark Proxy Voting Policies (Dec. 16, 2025) https://www.akingump.com/en/insights/alerts/iss-and-glass-lewis-publish-2026-benchmark-proxy-voting-policies; Akin Gump, White House Executive Order Targets Proxy advisory Firms – Potential Implications for Companies and Investors (Dec. 23, 2025), https://www.akingump.com/en/insights/alerts/white-house-executive-order-targets-proxy-advisory-firms-potential-implications-for-companies-and-investors; see also Glass Lewis 2026 Benchmark Policy Guidelines, supra note 39 (noting, among other things, that boards are expected to demonstrate appropriate skills and independence, oversee material risks such as cybersecurity and climate, and that 2026 updates include a discussion of mandatory arbitration provisions and updated pay-for-performance methodology guidance); ISS, ISS Proxy Voting Guidelines Benchmark Policy Changes for 2026 (Nov. 2025) https://www.issgovernance.com/file/policy/latest/updates/Americas-Policy-Updates.pdf (explaining that ISS will continue to evaluate board responsiveness to significant shareholder dissent, and will vote case-by-case on social and environmental shareholder proposals, such as climate change/greenhouse gas emission proposals, diversity/equality of opportunity proposals, human rights proposals and political contributions proposals).
49 See California Air Resources Board, CARB Approves Climate Transparency Regulation for Entities Doing Business in California (Feb. 26, 2026), https://ww2.arb.ca.gov/news/carb-approves-climate-transparency-regulation-entities-doing-business-california (approving initial SB 253/SB 261 regulations; setting August 10, 2026 as SB 253’s first‑year Scope 1 and Scope 2 reporting deadline; and noting that, due to a court order, SB 261 is not currently enforced and reporting under it is voluntary, with over 120 climate‑related financial risk reports voluntarily submitted to CARB’s public docket).
50 National Center for Public Policy Research, SEC Must Reject Costco’s Effort to Block Greenwashing Proposal (Sept. 30, 2025), https://nationalcenter.org/ncppr/2025/09/30/sec-must-reject-costcos-effort-to-block-greenwashing-proposal/.
51 See, e.g., i3 Vertical’s Schedule 14A Proxy Statement, https://investors.i3verticals.com/static-files/c00124d5-ac56-4dbd-94ab-e37116954c58 (removes the Nasdaq board diversity matric, but includes a line regarding board diversity); f5 Schedule 14A Proxy Statement, https://www.sec.gov/ix?doc=/Archives/edgar/data/1048695/000114036125002078/ny20033495x1_def14a.htm#tPS9 (example of adding diversity indicators into the board skills matrix).
52 According to a June 2025 large-scale survey by Catalyst, more than three out of four employees (76%) reported they are more likely to stay in their job long term if their employer continues to support diversity, equity and inclusion initiatives, and more than two out of five employees (43%) indicated they would consider leaving if their employer stopped supporting such efforts. New Study Finds Risks of Scaling Back DEI, Catalyst (June 11, 2025), https://www.catalyst.org/en-us/about/newsroom/2025/dei-scaleback-risks-study.
