Shareholders are overwhelmingly voting down proposals to end diversity, equity, and inclusion programs at top companies. The rejection of anti-DEI proposals is emboldening advocates who view it as a clear statement by investors that they are rejecting conservative policies and as an admonishment of President Trump. However, the rejections were not about politics, rather about the process and nature of the shareholder votes. Simply, the proposals were doomed to fail.
Republicans in the U.S. have taken a strong stance against DEI programs, calling them discriminatory. Under Attorney General Pam Bondi, the Department of Justice has made it clear they view DEI programs as illegal and will be using the office to prosecute violators, stating the “Department of Justice’s Civil Rights Division will investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector…” This creates a clear threat of legal liability against companies wishing to engage in DEI practices.
Conservative groups are also taking the issue directly to companies During the 2025 proxy season, the National Center for Public Policy Research, a conservative think tank, submitted the majority of the anti-DEI shareholder proposals in 2025.
The proposals referenced a series of cases, including Students for Fair Admissions v. Harvard that ruled race-based admissions are unconstitutional. As I noted in 2023, the Court’s opinion was a major blow to ESG and DEI, even though it did not directly address those issues in the corporate world. Other cases and the actions by the DOJ are connecting DEI as illegal discrimination.
While there may be legal merits to some of NCPPR’s arguments, the format of the shareholder proposal made passage nearly impossible. This has caused confusion as to the intent of corporate management versus their actions, causing activists to find false hope. However, a look at the type of proposals provides needed context.
Proposals submitted to the shareholders for approval come in the form of management proposals and shareholder proposals. Management proposals originate from the board of directors of the company. They have been vetted and worked through a clear process. As a result, those tend to have a high passage rate.
Shareholder proposals originate from individuals or organizations that own shares in the company. Each company has its own process for how a shareholder can introduce a proposal for approval by the shareholders. Typically, shareholder proposals are only a small fraction of the total proposals.
Shareholder proposals also have a much lower passage rate. According a BlackRock report, only 867 shareholder proposals were voted on in the 2023 – 2024 proxy year, compared to 168,400 management proposals. During that year, BlackRock only voted in favor of 99 of the shareholder proposals, approximately 11.4% of them. This has been consistent as BlackRock states they generally follow management for the direction of a company, while shareholder proposals tend to be in conflict with management proposals.
A study by Cooley of the 2025 proxy season showed similar results, stating that 3000 companies received 830 shareholder proposals in the 2025 proxy year. Looking at overall support, not passage rate, shareholder proposals relating to governance issues only received 35% support, environmental proposals received 13% support, and social proposals received 12% support. No DEI proposals passed, either in support or in opposition of the programs.
The lack of support for shareholder proposals is institutional and driven by the large financial management companies, like BlackRock, that tend to support management proposals at a much higher rate, while overwhelming rejecting shareholder proposals. This has led to confusion of policies as people attach meaning to the vote that is not tied to the stated rationale.
This misunderstanding of the shareholder proposal votes is not new. I wrote about this issue in August 2024, when BlackRock was accused of pulling support of ESG. The accusations were based on BlackRock’s votes against shareholder proposals that called for a larger focus on ESG.
In BlackRock’s 2024 Global Voting Spotlight, released in August 2024, the company stated “our analysis indicates that a relatively small number of shareholder proponents and advocacy groups filed the majority of proposals at U.S.-based companies – with fewer than 10 filing approximately 80% of proposals in the 2023-24 proxy year. Based on our review of proxy materials, these proponents often filed similar proposals at multiple companies, regardless of the specifics of their sectors or business models.”
The BlackRock report also stated, “we still observed many poor-quality proposals come to a vote, particularly on proposals that attempted to address climate and natural capital or company impacts on people-related issues. Consistent with last year, we found the majority of proposals addressing these topics were overreaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value. A significant percentage were focused on business risks that companies already had processes in place to address, making them redundant.”
The same rationale was offered in opposition of the anti-DEI proposals. In response to a proposal made to Apply by NCPPR, management stated the proposal “is unnecessary as Apple already has a well-established compliance program. The proposal also inappropriately attempts to restrict Apple’s ability to manage its own ordinary business operations, people and teams, and business strategies.”
Dick’s Sporting Goods offered a similar response, stating “we already have well established compliance and risk oversight programs and processes…” Others used similar language.
The argument by management is simply that this is an issue that should not be adopted by shareholders. Instead, it is a risk and compliance issue that should be addressed by management. As the legal landscape changes, the company needs to be able to adapt without the confines of a shareholder vote.
While DEI advocates will use the failure of the anti-DEI shareholder proposals as a sign that the tide is shifting against Trump, the data shows that is is just business as usual.