If you were looking for a clean narrative arc in corporate America’s relationship with board diversity, I regret to inform you that you will instead be getting litigation, proxy fine print, and a small activist nonprofit with a very busy fall calendar.
On Monday, the Wall Street Journal reported that Goldman Sachs plans to scrap diversity factors—race, gender identity, ethnicity, sexual orientation—from the formal criteria its board uses when identifying director candidates. This follows last year’s decision to drop a commitment to support board diversity among companies it was taking public. First the clients, now the mothership.
The mechanics are delightfully corporate. Goldman’s governance committee currently screens candidates on four primary factors, one of which is a broad conception of diversity: viewpoints, background, work experience, military service, and “other demographics.” The plan is to delete the “other demographics” list. Not diversity broadly. Just the part that can be bullet-pointed.
Why? A behind-the-scenes request from the conservative activist National Legal and Policy Center, which owns a small stake in the bank and submitted a shareholder proposal to remove DEI criteria. Goldman agreed to change the language; the proposal is withdrawn; everyone goes home.
Bloomberg followed with a sequel: American Express, Deere, and Johnson & Johnson have also dropped diversity criteria for selecting new directors, according to the same activist group.
If you zoom out, this is less a sudden collapse than a steady linguistic migration. As we told the Journal, companies began revisiting board diversity policy language around this time last year. The conversations weren’t, “We no longer value diverse perspectives.” They were, “What exactly counts as ‘illegal DEI,’ and how many adjectives can we safely delete?”
Investor expectations have recalibrated too. A year ago, investors pushed back hard on softened language. Today, there’s more recognition that demanding highly explicit recruiting commitments—particularly in this regulatory climate—may not be realistic. The tone has shifted from “Why aren’t you doing this?” to “Fine, but don’t make it weird.”
The Rooney Rule That Was (and Is Not)
At PeopleReturn, we’ve been tracking board recruitment policies—what many shorthand as “Rooney Rule” commitments—across the S&P 1500 and Russell 1000 for three years. We use a strict definition: active language that explicitly prioritizes including women and people of color in candidate pools.
For example, Costco states that:
The Company is committed to a policy of inclusiveness. In performing its responsibilities for identifying, screening and recommending candidates to the Board, the Committee should: ensure that candidates with a diversity of ethnicity and gender are included in each pool of candidates from which Board nominees are chosen; and seek diverse candidates by including in the candidate pool (among others) individuals from nonexecutive corporate positions and non-traditional environments.
That’s active language. That’s a policy. Here’s what’s happened to those policies:
In other words: explicit board recruitment policies have fallen by roughly two-thirds in two years. Boards still exist. Directors are still being recruited. The word “diversity” has not been outlawed. But the number of companies willing to commit, in writing, to specific demographic inclusion has collapsed.
You can call this capitulation, de-risking, normalization, or semantic minimalism. The practical effect is the same: less explicit language, fewer formal commitments, more discretion.
EEO-1: From Taboo to Table Stakes to…Taboo?
Now for the sequel no one asked for but everyone is litigating: EEO-1 disclosure.
When we founded PeopleReturn (then DiversIQ) in early 2021, roughly 30 public companies disclosed their EEO-1 workforce data—mostly tech firms under activist and employee pressure.
Then came the post-2020 investor campaign: letters from Calvert Research and Management, the New York City Comptroller’s Office, shareholder proposals, and escalating expectations.
Even Berkshire Hathaway—which opposed a proposal and whose chairman, Warren Buffett, was not enthusiastic—eventually relented.
Disclosure rates exploded:
By the end of 2024, publishing your EEO-1 felt like table stakes. Then 2025 happened.
Latest disclosure rates:
- S&P 100: 62.0%
- S&P 500: 57.2%
- Russell 1000: 35.8%
That’s not a gentle plateau. That’s a step down.
Some companies have quietly kept 2023 reports on their websites but signaled they won’t update them—Alphabet, Meta Platforms, Microsoft, among others.
Meanwhile, investors have restarted letter-writing and proposal campaigns. New York pension funds are suing AT&T over exclusion of a proposal requesting renewed disclosure.
The twist: even if companies don’t publish, the data may still become public.
FOIA, Illinois, and the Accidental Data Lake
Nearly a decade ago, a reporter at the Center for Investigative Reporting filed a FOIA request with the Department of Labor for 2016 EEO-1 reports. Years of litigation later, the U.S. Court of Appeals for the Ninth Circuit ruled that these reports are not exempt under FOIA’s confidential business information exemption.
In 2023, the DOL released ~20,000 contractor reports for 2016–2020. About 4,000 contractors kept fighting. Those remaining reports are now set to be released.
Separately, Illinois passed a law requiring companies with significant in-state presence to submit EEO-1 reports to the Secretary of State, which then posts them publicly. Last year alone, 5,585 reports were published.
This leads to the fun part: some companies that declined to publish their EEO-1 reports voluntarily have them publicly available anyway via Illinois filings. That includes firms like: Tesla, CH Robinson, Cintas, International Paper, United Airlines, Robinhood, Coinbase, Paramount, Linde, Hormel.
In other words: disclosure is declining in proxies and sustainability reports, while public availability of raw data may actually be increasing through litigation and state law.
Call it Schrödinger’s transparency. The company is both disclosing and not disclosing, depending on which website you check.
So What?
- Language is retreating faster than practice. Companies are scrubbing explicit commitments, particularly around board recruitment.
- Voluntary workforce disclosure is down sharply.
- Compelled or incidental disclosure may rise. FOIA rulings and state-level requirements could expand public data access even as companies pull back from glossy PDFs.
- Investor strategy is shifting. From persuasion and norms to litigation and procedural fights over proposal exclusion.
If you are an investor, proxy advisor, journalist, or corporate governance nerd, this is not the end of the DEI story. It’s the procedural middle.
We’ll be at the Council of Institutional Investors Spring Conference in Washington, DC (March 9–11). Many of our clients use PeopleReturn as an engagement and proxy intelligence partner, particularly as the ground shifts under board policies and workforce disclosure.
If you’ll be there and want to talk about what’s actually changing (and what’s just being renamed), let us know.
What we’re reading:
- What drives the wage gap between men and women? why do men earn more than women? Perhaps male “dominators” succeed where female “submissives” do not. Yet the weight of research suggests that, after accounting for the constraints women face from bearing and rearing children, there is little left to explain. The most effective economist in the field, Claudia Goldin of Harvard University, who won a Nobel prize in 2023, seemed to settle the debate. Motherhood, her work suggested, explains basically all of the wage gap. (The Economist)
- Research Reveals a Fundamental Shift in How Investors View ESG As recently as five years ago, environmental, social, and governance (ESG) investing was pitched as a market revolution—led by idealistic young investors and destined to reinvent investing. Five years and a few economic shocks later, the revolution looks more like a recalibration—but that doesn’t mean ESG has disappeared. Our research finds that enthusiasm hasn’t vanished; it has converged on a more pragmatic, risk-first approach. (Harvard Business Review)
- FTC and DOJ Signal Expanded Antitrust Scrutiny of DEI, ESG, and “Viewpoint Competition” Initiatives Federal Trade Commission (FTC) Chairman Andrew N. Ferguson issued warning letters to 42 U.S. law firms on January 30, 2026, regarding potentially unfair and anticompetitive employment practices tied to diversity, equity, and inclusion (DEI) hiring initiatives. According to the FTC’s press release, the agency is concerned that coordinated use of DEI “metrics,” candidate pools, or promotion criteria may distort competition in labor markets – particularly when employers make collective decisions affecting hiring, compensation, or advancement. (Wiley Rein) and Corporate DEI Hindered By Threats and Probes—Not Rules or Cases Two federal actions, issued within days of each other by different agencies, point to a common enforcement strategy emerging in Washington over diversity, equity, and inclusion—one that relies less on winning cases in court and more on using investigation and threat as tools of governance. This new strategy signals a heightened legal risk for businesses and professional firms that participate in collective governance initiatives, even when those initiatives stop short of binding commitments or discriminatory outcomes. For regulators, the strategy offers leverage without the constraints of judicial review. (Bloomberg Law)
- Human Capital as a Financial Asset: A Systematic Survey of Literature This study provides a systematic literature review of recent research examining the relationship between human capital management (HCM) practices and corporate financial performance. As firms increasingly operate in knowledge-driven and intangible-intensive environments, traditional finance models centred on physical assets and financial capital have proven insufficient to explain variations in firm profitability, value, and risk. Against this backdrop, the present review synthesises contemporary evidence on how employee-related practices function as economically meaningful drivers of firm-level financial outcomes. (International Journal of Technology and Applied Science)
- Target makes drastic workforce shift to fix customer experience Target is undergoing a major transformation after struggling for years with weak sales amid controversies that led to consumer boycotts. The retail chain recently replaced its CEO in an attempt to repair its reputation, and he is wasting no time enforcing a drastic workforce shakeup aimed at improving the customer experience. (The Street)
- America’s Human Capital Is Eroding America is having a collective freakout about jobs — specifically, that soon AI will do everything and leave everyone unemployable. This concern is not necessarily misplaced, but it is better understood as part of a larger worry: that one of the country’s most critical resources, human capital, is eroding. A large, diverse and highly skilled labor force is what made the US an economic powerhouse. Now both the stock and value of its human capital is degrading, and almost no one is doing anything to stop it. (Bloomberg)
- U.S. Employee Engagement Declines From 2020 Peak The percentage of U.S. employees who are actively engaged at work averaged 31% in 2025, unchanged from 2024, according to Gallup’s employee engagement survey. This follows several years of decline from a high of 36% in 2020, which came after a decade of steady growth. (Gallup)
- Ethnic minorities are driving America’s startup boom Kris Hale founded Dope Pieces, an artisanal puzzlemaker, in 2018. But the company really took off, she says, after the covid-19 lockdowns sent people “puzzle crazy”. They also prompted millions of other Americans to launch startups, and today the boom is still going. The Census Bureau counted a record-breaking 5.7m applications to establish new businesses in 2025 (see chart 1). That poses some puzzles for economists. Why have entrepreneurs been so busy since the pandemic? And why has the surge been almost entirely among those who, like Ms Hale, are in ethnic minorities? (The Economist)