Costco board of directors urge shareholders to continue DEI programs

The company’s board of directors unanimously recommended that shareholders vote against a proposal brought forward by the National Center for Public Policy Research, a conservative think tank. The proposal called for Costco to reevaluate and issue a report on the potential financial risks associated with maintaining its DEI initiatives. The group said Costco was engaging in possible "illegal discrimination" against white, Asian, male, or straight employees due the DEI policies.

Costco defended its DEI policies, stating they are crucial for attracting and retaining a diverse workforce, which enhances the company's ability to serve its members.

“Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings, promoting the ‘treasure hunt’ that our customers value,” the company said in a proxy statement to investors. “We believe (and member feedback shows) that many of our members like to see themselves reflected in the people in our warehouses with whom they interact.”

According to CNN, Costco currently has a chief diversity officer as well as a supplier program that focuses on expanding diverse businesses. It also donates to a college fund that specifically benefits minority groups.

In addition to urging shareholders to reject the proposal, Costco criticized the National Center for Public Policy Research, accusing the group of pushing an anti-diversity agenda disguised as risk reduction.

“The proponent professes concern about legal and financial risks to the company and its shareholders associated with the diversity initiatives,” Costco said. “The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the company but abolition of diversity initiatives.”

Costco’s decision to double down on its DEI efforts contrasts with a broader trend among major companies like Walmart, John Deere, and Lowe’s, which have scaled back such programs amid mounting public and scrutiny from activist Robby Starbuck as well as others.