- In today’s CEO Daily: Diane Brady talks to Conference Board CEO Steve Odland about how companies are dropping the DEI label but not its goals.
- The big story: Germany’s new leader isn’t a fan of Trump.
- The markets: Licking their wounds.
- Analyst notes from Goldman Sachs (on U.S. GDP), Convera (on the dollar), Wedbush (on Palantir), and UBS (on the “DOGE dividend”).
- Plus: All the news and watercooler chat from Fortune.
Good morning. Being a corporate board member sounds like one of the sweetest gigs around, with average compensation north of $325,000 a year to represent the interests of shareholders in a company. But it has become more challenging amid pressure from activist shareholders. That’s especially true when those shareholders are pushing you to do the opposite of what you may know to be the right thing for the long-term health of the company.
So what’s in store for the 2025 proxy season? The Conference Board has a preview out this morning that predicts more pressure on boards, especially in sensitive areas like DEI and ESG. Companies such as Citigroup, Meta, PepsiCo, and Target have publicly rolled back their DEI efforts, which has spawned its own backlash. The Conference Board notes that there were 13 anti-DEI proposals at Russell 3000 companies in 2024 and 112 anti-ESG proposals. The number of shareholder activism campaigns have increased from 206 in 2021 to 411 last year, but support among shareholders dropped from 57% to 38%.
Conference Board CEO Steve Odland says that CEOs are telling him they’re deciding to ditch politically sensitive labels without shifting underlying policies. “The term DEI has now been infused with so much baggage that most companies are saying, let's stop using the term and call it something else,” he says. “Don’t discriminate and don’t do quotas. Be careful how you talk about them so you don’t push an extremist button but don’t give up on what you’re trying to accomplish.”
Most of the leaders I speak to aren’t abandoning their desire to have a diverse, engaged workforce, nor are they ditching sustainability efforts to satisfy critics. But directors have a fiduciary duty to put their political beliefs aside when they enter a boardroom to focus on what’s good for the business and good for shareholders. Says Odland: “You can have a flaming red shirt or a flaming blue shirt, but when they're talking about the business issues, there is fair consensus.”You can read the full Conference Board 2025 Proxy Season Preview here, which was done in cooperation with ESGAUGE, Russell Reynolds Associates, and The Rutgers Center for Corporate Governance.
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Contact CEO Daily via Diane Brady, diane.brady@fortune.com, LinkedIn.
