In a significant shift, Brown-Forman Corp., the producer of Jack Daniels whiskey, has announced that it will scale back its diversity, equity, and inclusion (DEI) initiatives.
This decision comes in response to mounting pressure on social media, spearheaded by "anti-woke" activist Robby Starbuck, who had threatened to launch a boycott against the company.
According to The New York Post, Brown-Forman, a spirits behemoth with a market capitalization of $21.37 billion, is the latest in a series of companies to dismantle their DEI programs. Other notable firms that have taken similar actions include Harley-Davidson, Tractor Supply, and John Deere. These companies, which rely heavily on clientele from conservative-leaning states, have succumbed to boycott threats from corporate activist Starbuck. He claimed that Jack Daniels was next on his list, but the company preemptively altered its policies before he could initiate a boycott.
Starbuck stated, Were now forcing multi-billion dollar organizations to change their policies without even posting just from fear they have of being the next company that we expose. Brown-Forman's new direction includes discontinuing the practice of tying bonuses and pay to DEI progress, ending its participation in an annual ranking of companies with an LGBTQ-friendly environment, and discarding its plans to advocate for a more diverse group of suppliers.
The company had previously linked 10% of executives short-term compensation to progress on DEI goals, as stated in a 2023 annual report. The Kentucky-based company first introduced its DEI goals in 2019. However, in a recent letter to employees, company executives explained, Since then, the world has evolved, our business has changed, and the legal and external landscape has shifted dramatically, particularly within the United States. With these new dynamics at play, we must adjust our work to ensure it continues to drive business results while appropriately recognizing the current environment in which we find ourselves.
This decision has not significantly impacted Brown-Forman's shares, which dipped less than 1% on Thursday. However, it does reflect a broader trend of companies responding to calls to cut DEI goals, largely led by Starbuck.
Ken Mahoney, CEO of Mahoney Asset Management, commented on this trend, saying, I mean the name diversity, equity, inclusion you would think thats a good thing. But the way the companies express it, you squeeze out other potential employees that could have even better performance. Mahoney noted that companies including Tesla, Home Depot, Wayfair, and Walmart have been phasing out their DEI leadership goals since consumers started threatening them with boycotts. He added, It hurts their image because consumers feel like theyre not putting the best people in place, but rather keeping score. And for this group of consumers, were not born and raised this way.
A Gallup-Bentley University survey revealed that only 38% of Americans want companies to take a stance on current events and policies. DEI goals have become more political, with conservative activists calling the programs unfair while liberal activists argue the opposite.
Starbuck also targets companies that participate in the Human Rights Campaigns ranking of LGBTQ-friendly workplaces which previously awarded Brown-Forman a perfect score of 100. Psychotherapist Jonathan Alpert commented on this issue, stating, Jack Daniels has clearly reached the sobering conclusion that being hyper focused on factors other than merit do not increase the bottom line. He cited examples of Target and Bud Light, whose sales suffered after they launched social justice initiatives.
Alpert argued that DEI policies can create a perception of unfairness and alienate employees. He stated, If DEI initiatives were working, we wouldnt be having this discussion about them right now. In fact, more companies would be hopping on the bandwagon but theyre not. This shift in corporate strategy underscores the ongoing debate over the role and effectiveness of DEI programs in the business world.
Login