As the Trump administration vows to rid the government of diversity, equity, and inclusion programs while punishing companies that have DEI systems, Costco shareholders overwhelmingly rejected an effort to eliminate the company's DEI programs.
According to the Associated Press, those holding 98% of the company's shares voted against the proposal that would eliminate certain DEI programs within Costco.
The vote came after the company's board urged its shareholders to vote against a proposal submitted by the National Center for Public Policy Research that called on Costco to eliminate DEI programs. The group claims that DEI programs are discriminatory and put the company at financial risk.
"It's clear that DEI holds litigation, reputational, and financial risks to the Company, and therefore financial risks to shareholders," the National Center for Public Policy Research wrote in its letter of support.
The National Center for Public Policy Research said the Supreme Court decision reached in 2023 in SFFA v. Harvard indicated that companies' DEI programs could potentially be illegal. The Supreme Court ruled that affirmative action policies by colleges violated the equal protection clause of the 14th Amendment.
Costco's board countered that the group was incorrect in its belief that the company's DEI policies violate the law.
RELATED STORY | Costco memberships grow despite price increase as profits surge
"Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members, and suppliers," the board wrote in response to the proposal. "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."
The vote comes as numerous companies have eliminated DEI programs in response to backlash from conservatives and President Trump.
Within hours of taking office, President Trump signed an executive order essentially ridding the federal government of DEI training and positions. The president also eliminated a past executive order that required federal contractors to have non-discriminatory practices in hiring and employment.
RELATED STORY | Presidential Shift: Trump reverses key Biden administration DEI policies
