DEI is dying: Communicating the new reality without alienating stakeholders

DEI is dying, and President Donald Trump is happy to dig the grave. He signed executive orders ending race-based hiring practices by federal government agencies just hours after resuming the presidency. Then he reignited the flames of controversy by assuming that Biden-era DEI policies caused last week’s tragic plane crash.

This puts corporate America in a tough spot. On the one hand, companies have been backing off of DEI for over a year, and are now further incentivized to do so to secure federal government contracts. But on the other hand, presidents and their preferred policies don’t last forever, so what if DEI comes back into vogue in four or eight or twelve years? Alienating the stakeholder fabric of investors, employees, and customers could harm corporate reputations for decades to come.

The sliver of good news is that the communications strategy necessary to thread this needle doesn’t require companies to gamble with joining “the resistance” or going “full MAGA.” Instead, they can take four steps to make profit in the short-term without sacrificing long-term consumer brand trust.

Massage the message

BlackRock CEO Larry Fink has long been the right’s “stakeholder capitalism” bogeyman for promoting Environmental, Social, Governance (ESG) initiatives. In 2017, he suggested that his firm would leverage executive compensation to “force” companies to implement diversity and inclusion efforts. But Fink was also one of the first business leaders to publicly soften his stances when he admitted in 2023 that he was no longer using the term “ESG” because it had been “weaponized.”

This pivot doesn’t mean Blackrock has abandoned certain values – it’s more a recognition that being outspoken on divisive issues is untenable for corporations in the public sector. That’s why Fink has backed off advocacy for “decarbonization” in favor of “energy pragmatism.” It’s a nuanced approach that provides a blueprint for companies trying to reduce politically charged scrutiny of their hiring practices.

There’s a fine line between “hiding” – which savvy observers will expose – and massaging. The latter carries fewer risks of alienating stakeholders and avoids headlines and social media tirades that go viral for all the wrong reasons.

No unnecessary risks

For the next four years, there’s someone at 1600 Pennsylvania Avenue who’s more than willing to say everything out loud. It’s an exercise in futility to keep up with or make a response to every sound bite or tweet coming from Trump – love him or hate him, it will only alienate half of the public. Instead, corporations can let Trump suck the air out of the room while they keep their heads down and make decisions on behalf of the stakeholders that matter.

For example, none of the companies that have distanced themselves from institutionalized DEI stood with Trump’s knee-jerk assumptions that DEI was responsible for the plane crash. It was an obvious choice that avoided self-inflicted injuries in a partisan horse race – and kept diversity in the workplace in its appropriate nonpartisan, case-by-case category of corporate strategy.

Serve your customers, not irrelevant critics

When Trader Joe’s refused to abandon its ethnic food names in 2020, the company said that real customers – not a petition that generated national media coverage – would guide its strategic decisions. Costco did the same in 2025, bucking the corporate trend by pledging to maintain its DEI practices.

Both decisions resulted in viral controversy, as did decisions by Meta, Apple, and Amazon to donate to Trump’s inauguration.

But each of these companies made a choice guided by what leadership thought was best for their companies’ long-term success, not short-term headlines or viral social media posts. Trader Joe’s wanted to keep its unique brand culture, Costco’s corporate values shine through its commitment to investing in its team members, and the three Big Tech firms wanted billions of dollars in government contracts.

Sure, they’ll alienate somebody with every decision. But in 2025, that’s inevitable.

Government contractors: Tout your ethics

If there’s a corporate niche that’s in for a tough DEI battle, it’s government contractors. These companies have met requirements for veterans, women, minorities, disabled, etc. for decades – and often revamped operations for the Biden-era DEI requirements and new corporate culture.

Now that things have changed, these companies face revenue pressure from the feds and brand pressure from diversity advocates.

They may be able to have their profit and spend it, too, however, by showcasing how universal values like excellent customer service, paying people well, prioritizing reasonable prices, and internal accountability are a cushion between top-down policies and the end-point user.

The Catholic Church, for example, continues to provide medical, education, and immigration services even with administrations that oppose its pro-life and human dignity values. It does so by noting that its clients would be worse off without its services.

Corporations can follow the same argument. No, they may not love everything Trump does. But the billions of dollars in taxpayer dollars flowing to Microsoft and Apple would be used worse by companies that don’t have these firms’ operational capabilities and cultural norms.

What’s your corporate comms brand reset?

Good business leaders carefully assess why their companies are what they are. They constantly ask, How did we get here, and is this where we want to be? Keep in mind, just five years ago, the Black Lives Matter movement was driving the conversation on race, and in response many major corporations established DEI offices and made pledges to increase hiring diversity. But today, consumers and government officials have made their shifting sentiments clear.

That’s why universal values are such a key part of how corporations can protect their reputations during the Trump years. Customers want quality products for reasonable prices, employees want a pleasant work environment, and investors want to see profits. These are the priority audiences for any business. They’re also the easiest to communicate as part of company values and ethics.

Dustin Siggins originally published this piece at Real Clear Markets.