Even without shareholder pressure or environmental, social, and governance public company reporting requirements, private companies and their boards may need to be more proactive in identifying gaps in corporate diversity, equity, and inclusion (DE&I) programs and policies—gaps that could expose the company to potential reputational, regulatory, and litigation risk.
Meanwhile, the US Supreme Court’s decision this past year to end affirmative action in colleges and universities has triggered widespread confusion among business leaders about new potential litigation risks on the opposite end of the spectrum: lawsuits targeting the same corporate DE&I programs and policies.
Given the fraught political climate and uncertain legal landscape, management and boards may want to revisit their DE&I programs and initiatives to assess and mitigate any emerging legal or reputational risks by conducting a DE&I audit. Coming into any potential litigation with greater awareness and more effective policies puts both corporations and their boards in a stronger position than if a vulnerability were to be discovered after a suit is filed.