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Boardroom Battle: Warren Buffet’s Berkshire Hathaway Shareholders Aim To Nix Diversity

By Gary J. Nix

  • Berkshire Hathaway shareholders, with Warren Buffet wielding a 31% voting stake, voted against six proposals concerning climate change, diversity, and inclusion
  • Support for proposals advocating racial equity and civil rights audits saw a steep decline averaging 22% in 2023, down from 46% in 2022

Despite the flurry of corporate promises in 2020, particularly in the wake of George Floyd’s murder, professionals in the DEI space expressed concerns about the authenticity of these commitments. Yet, Berkshire Hathaway’s board’s recent rejection of six proposals addressing climate change, diversity, and inclusion further highlights the disconnect between corporate rhetoric and action. Further, the alarming drop in backing for racial equity/civil rights audits from 46% in 2022 to 22% in 2023 signals a concerning trend and threatens any advancements on DEI initiatives.

Why This Matters: Warren Buffet’s persona is that of a liberal executive. Financially, he leans towards the concept of the wealthy having a higher responsibility towards paying taxes and relieving some of the financial burden from the rest of us. However, he was in lockstep with the shareholders’ decision to reject proposals that, at least on the surface, align with those who hold sociocultural change high on their list of values.

It’s intriguing to observe that businesses, despite claiming revenue maximization as a priority, often dismiss or refuse to implement policies that could lead to increased worker dedication and improved performance. For instance, improving gender or ethnic diversity can boost the likelihood of outperformance from the 1st to 4th quartile by 39%. Given this data, the question arises: Why are businesses shying away from integrating DEI into their operations?

DEI initiatives tend to put everyone on the chopping board regardless of their position. Those in these positions of privilege may perceive DEI efforts as a threat to their status or authority so it’s basically a ploy to hold on to power and keep the status quo unchanged. What they may not realize is that in the long run, when large companies reject diversity proposals, it can negatively impact corporate growth across industries, primarily when led by business leaders with the type of influence of Warren Buffet who holds a 31% voting stake in Berkshire Hathaway.

Situational Awareness:​ The 2020 warnings of how sustainable these DEI promises were highlighted a critical question about the purpose and goals of all businesses: Is it about making money or having control? Furthermore, sidestepping policies focusing on DEI-related improvements and their business benefits makes people question ideas of capitalism, government, policy, and the purpose of business. The key to remember is that marketing and marketers are responsible for their work, but the responsibility to the consumer is often best, even for the shareholders.

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