Key takeaways:
- Stay proactive with compliance: Conduct thorough audits of DEI initiatives to identify potential legal risks and ensure alignment with anti-discrimination laws.
- Reframe DEI messaging: Use inclusive and legally sound language such as “removing barriers” instead of politically charged terminology.
- Engage stakeholders thoughtfully: Balance internal employee expectations with external pressures by maintaining transparency and strategic communication.
- Ensure psychological safety: Foster a supportive workplace where all employees feel safe and valued, regardless of political and legal shifts.
Recent executive orders from the U.S. administration have significantly altered the landscape of Diversity, Equity, and Inclusion (DEI) in corporate America. These actions have heightened scrutiny on DEI initiatives, particularly for federal contractors and publicly traded companies.
While the executive orders do not create new laws, they influence enforcement priorities, legal risks, and corporate responses.
DEI leaders at large companies must now navigate a complex and rapidly shifting environment.
We’ll explore key takeaways from DEI Board Members on how they’re navigating the new executive orders and mitigating risk while maintaining DEI commitments.
Executive Orders: What’s Changing for DEI Initiatives?
Recent executive orders have reshaped DEI policies in significant ways. Federal agencies have been instructed to eliminate diversity-related training, hiring practices, and funding programs deemed discriminatory.
Additionally, mandates for merit-based hiring now require federal contractors to certify compliance with anti-discrimination laws. These orders do not introduce new laws but increase enforcement priorities, creating a landscape of legal uncertainty and corporate caution.
According to DEI Board Members, these executive orders are not always immediately enforceable, but they create a shifting and highly scrutinized environment for corporate DEI efforts.
During a confidential leadership discussion on recent executive orders and how they impact your DEI work, our members said that companies must stay agile in their approach, reassessing programs and legal strategies to ensure compliance while maintaining their commitment to diversity.
Review Your DEI Initiatives to Navigate Increased Scrutiny and Legal Considerations
Findings from our State of DEI report reveal that 67% of DEI leaders report a greater-than-expected impact from political actions against DEI. Increased regulatory scrutiny has driven companies to reevaluate their programs, particularly those tied to supplier diversity, leadership representation, and DEI-focused grants.
Many organizations are now conducting vulnerability assessments to ensure compliance while maintaining DEI efforts. According to DEI Board members, legal uncertainty has made it imperative for organizations to regularly audit their DEI initiatives and align them with business imperatives to reduce risk while preserving inclusion efforts.
Additionally, concerns about whistleblower complaints have prompted some organizations to adjust access to DEI-related data.
Companies are revisiting the framing of their initiatives, moving away from politically charged language and emphasizing a broader cultural and community approach to inclusivity.
Adapt Your Strategy Without Compromising Your Corporate Response
Despite heightened scrutiny, companies are not abandoning DEI but refining their approaches. According to DEI Board members, many organizations are reframing DEI as a business imperative, emphasizing its role in talent retention, consumer engagement, and innovation.
The State of DEI Report also showed that 73% of organizations have adjusted DEI messaging in response to political and leadership pressures. Employee Resource Groups (ERGs) are shifting from advocacy to networking and mentorship, while supplier diversity programs are being repositioned to minimize political risk.
Some organizations are also modifying public commitments to DEI. While internal efforts remain strong, external corporate messaging is becoming more neutral, using terms like “inclusion” and “belonging” rather than politically charged language. This strategic shift allows companies to sustain their DEI goals without attracting unwanted legal or political attention.
Balance Employee Expectations and External Pressures
As companies adapt their DEI strategies, they must also balance internal expectations with external pressures. Employees continue to demand inclusive workplaces, while regulatory bodies, activist groups, and shareholders exert influence over corporate policies.
In our private leadership discussion on the recent executive order and how they impact your DEI work, our members highlighted that their organizations are rethinking how they communicate DEI efforts to employees.
A focus on internal engagement such as storytelling, leadership visibility, and employee-driven initiatives has helped companies maintain support while avoiding perceptions of preferential treatment.
DEI Board members also reported that their companies are also facing increased scrutiny around LGBTQ+ policies, particularly regarding healthcare coverage for transgender employees and dependents. Immigration-related executive orders are adding further complexity, creating concerns for multinational corporations navigating compliance across different regions.
To address these concerns, our members stressed that providing a psychologically safe workplace remains a core responsibility.
“Most companies have a vision, mission, and values,” said Pamela Sherman, Managing Director of Culture of Inclusion at Applied Materials in our guide on navigating DEI during election years. “So, how can your company support employees in embodying these principles, while transcending political divisions?”
She discussed how it’s critical to create steps to make employees feel safe psychologically, emotionally, and even physically, to maintain and improve their overall well-being at work.
“It’s about psychological safety for everyone,” Pamela said. “Ensuring a safe environment involves respecting boundaries and refraining from heated debates, as political discussions can easily lead to arguments. It’s crucial to prioritize the company’s mission as the motivating factor behind our work here, rather than engaging in political debates.”
It’s about psychological safety for everyone. Ensuring a safe environment involves respecting boundaries and refraining from heated debates, as political discussions can easily lead to arguments. It’s crucial to prioritize the company’s mission as the motivating factor behind our work here, rather than engaging in political debates.
Pamela Sherman, Applied Materials
Take Proactive Steps to Mitigate Risks
DEI Board Members recommended conducting a thorough audit of existing DEI policies to identify potential compliance risks. Engaging legal counsel for preemptive assessments is also crucial, particularly for organizations with federal contracts.
The State of DEI Report indicated that organizations are making targeted adjustments rather than sweeping changes. Companies are rewording eligibility requirements for leadership programs and scholarships to ensure alignment with equal employment opportunity standards.
Many organizations are also implementing contingency plans for DEI initiatives that may come under scrutiny, ensuring that they can be defended as essential to business operations.
Gain Support from Other DEI Leaders in Our Community
The current political and legal climate requires DEI leaders to be strategic, informed, and proactive. Executive orders may introduce new challenges, but they do not eliminate the need for workplace diversity initiatives.
DEI leaders today are navigating a complex and often isolating reality. The political landscape is shifting, stakeholders are scrutinizing DEI efforts more than ever, and nearly half of DEI professionals have considered career changes in recent months.
To help you navigate the evolving landscape of DEI, apply to join the DEI Board to connect with your peers at major enterprises in a confidential, vendor-free space to share real-time strategies, benchmark initiatives, and get actionable insights from those facing the same challenges.
