Well, we’re certainly living in interesting times—and few areas of governance are shifting more dramatically right now than Diversity, Equity, and Inclusion (DEI). A topic once seen as an essential pillar of corporate responsibility is now the centre of a growing backlash, particularly emanating from the United States. And while Australia may be a different regulatory and cultural landscape, make no mistake: these tides are reaching our shores.
A Wake-Up Call from the U.S.
In recent weeks, we’ve witnessed U.S.-based corporations—including major household names—scramble to recalibrate their DEI strategies. Some have gone so far as to delete entire DEI policies from their websites and scrub language from employee handbooks. One not-for-profit organisation I’ve been advising in the U.S. chose to significantly tone down its DEI stance virtually overnight to safeguard essential government funding. The board took legal advice, external counsel, and made a decision grounded not in ideology—but in survival.
These choices have not been without consequence. One board member resigned in protest. Staff followed. Protests were launched by stakeholder groups. The backlash was real—and volatile. But what’s been even more striking is the speed of the change. Communication couldn’t keep up with policy shifts. Stakeholders were left in the dark. And the result? Deep mistrust and reputational damage.
The Australian Response: Time to Tune In
Here in Australia, we’re already seeing ripple effects—especially within multinationals with U.S. headquarters. DEI policies are being watered down, adjusted, or removed. Language is being softened. And while it may feel like we’re simply following global cues, we must stop and ask: Is this the right direction for Australian organisations and their boards?
According to the Australian Institute of Company Directors (AICD):
“Directors have a responsibility to create inclusive boardrooms and workplaces where different perspectives are valued, and diversity is leveraged to improve decision-making and governance outcomes.” – AICD, Diversity on Boards Position Statement
The AICD has long advocated for board-level leadership on DEI, not as a token gesture, but as a governance imperative. And while they acknowledge that DEI must be meaningful and measurable—not performative—removing these frameworks altogether poses clear reputational, cultural, and operational risks.
The Pendulum Swings Too Far… In Both Directions
Let’s be honest: in the DEI space, the pendulum probably did swing too far for some organisations. In an attempt to operationalise inclusion, businesses were consumed by policies, frameworks, reporting requirements, targets, and quotas. It became overly bureaucratic—and in many cases—overly politicised.
But now, the reaction seems equally extreme: gutting entire programs, stripping inclusive language, and signalling that these efforts were nothing more than PR. This risks alienating the very communities DEI was meant to support, not to mention creating confusion and fear internally.
What Boards Need to Know—and Do—Now
As directors, we must resist the temptation to react purely out of fear or political pressure. The right path forward is not abandonment, but recalibration. Here’s what boards should be focusing on:
- Revisit the ‘Why’ Behind DEI: The original intent—building fair, inclusive, and respectful workplaces—remains essential. Don’t let shifting political winds make you lose sight of that.
- Focus on Culture Over Compliance: Instead of obsessing over box-ticking, focus on cultivating a truly inclusive culture that improves performance and trust.
- Communicate With Clarity and Compassion: If changes do need to be made to DEI programs, communicate clearly, transparently, and with respect. Bring your people along for the journey.
- Maintain a Measured Approach: Avoid the extremes. The middle ground—guided by good governance, stakeholder input, and strategic thinking—is where sustainable outcomes live.
- Understand the Reputational Risk: As highlighted by the Governance Institute of Australia, boards must factor in ESG considerations, including social impact, in reputation management:
Final Thoughts: The DEI Spirit Must Endure
We are living through a DEI reckoning, and yes—organisations must evolve. But as we do, we cannot abandon the fundamental principles of fairness, equity, and opportunity for all. These ideals are bigger than any political cycle. They’re about people, performance, and purpose.
For Australian boards, now is not the time to panic—it’s the time to lead. With care. With clarity. And with common sense.