Costco board member defends DEI practices, rebukes companies scrapping policies
A Costco board member has taken aim at companies rolling back diversity, equity and inclusion (DEI) policies, calling for businesses to "maximize" DEI instead as the wholesaler faces pressure to join the growing list of brands ditching the controversial practice.
Jeff Raikes, co-founder of the Raikes Foundation and former CEO of the Bill & Melinda Gates Foundation, has served on Costco's board of directors since 2008, according to Costco's corporate website. Raikes and other board members have come under scrutiny in recent days after they shut down a shareholder request to dismantle DEI internally and called on other shareholders to vote against the proposal seeking to eliminate Costco's DEI program in an upcoming meeting.
The board's position came as a surprise to some, in light of a recent corporate trend that's spurred a widespread abandonment of DEI policies. But a Fox News Digital assessment of Raikes' online history revealed a staunch proponent of DEI practices - and a man on a mission to discourage companies from biding them farewell.
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While businesses began to announce their departures from DEI policies last year, Raikes urged companies to expand such practices at work, insisting that scaling down DEI in businesses would harm the economy.
In a November post about the decline of DEI, Raikes argued, "Attacks on DEI aren’t just bad for business—they hurt our economy. A diverse workforce drives innovation, expands markets, and fuels growth. Let’s focus on building a future where all talent thrives." He concluded his post on X with the hashtag, "InclusiveEconomy."
A month earlier, Raikes similarly railed against the growing number of companies abandoning DEI policies as critics deemed them discriminatory in hiring.
"#DEI isn’t just the right thing to do; it’s essential for driving innovation and business success. Scaling back DEI efforts weakens companies’ ability to grow, innovate, and connect with diverse markets," he wrote.
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In a subsequent post from March, Raikes shared a column he wrote for Forbes where he urged the private sector to "lead the way in encouraging diversity, equity, and inclusion in America’s workplaces" and called on businesses to buck the anti-DEI trend and instead "maximize DEI efforts" at work.
He blamed "opportunistic politicians" for trying to "frighten and divide" the country by "making DEI a dirty word." President-elect Donald Trump was vocal against DEI policies on the campaign trail.
Last month, Raikes responded to a post about colleges voting to scrap DEI offices by reiterating the "vital role DEI plays in education," arguing that "removing DEI offices moves us further from equity, not closer."
"It’s essential for student success and a strong economy," he wrote on X.
Last week, the Costco board of directors wrote a message to investors urging them to reject a push to scale back DEI at the wholesaler at the upcoming annual Costco shareholders meeting on Jan. 23.
"Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members, and suppliers. Our efforts around diversity, equity and inclusion follow our code of ethics: For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected," they wrote.
"Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed. This capacity is critical because we owe our success to our now over 300,000 employees around the globe."
Their letter was in response to a proposal brought by the National Center for Public Policy Research challenging the legality of Costco's DEI program after the Supreme Court's ruling in SFFA v. Harvard that discriminating on the basis of race in college admissions violates the equal protection clause of the 14th Amendment.
The proposal cites how attorneys general of 13 states have warned Fortune 100 companies that the ruling implicated corporate DEI programs, and a number of lawsuits have been filed.
Companies that have since rolled back DEI commitments and/or laid off employees from DEI departments include Alphabet, Meta, Microsoft, Zoom and John Deere, the proposal says, although Costco's board says Microsoft later clarified that it had eliminated two redundant DEI roles, yet its focus on diversity and inclusion "remains unwavering."
Despite the Supreme Court ruling, Costco's board of directors asserted that its DEI practices "are legally appropriate, and nothing in the proposal demonstrates otherwise." The board also claimed that the National Center for Public Policy Research's request for a study of Costco's DEI practices "reflects a policy bias" and threatens to burden company resources.
Citing a 2023 federal district court decision, the board argued that the National Center for Public Policy Research's "broader agenda is not reducing risk for the Company but abolition of diversity initiatives." The board claims that the foundation is continuing its "shareholder activism," noting how the National Center for Public Policy Research has previously expressed a commitment to "fighting back" against "the evils of woke politicized capital and companies."
"We welcome members from all walks of life and backgrounds. As our membership diversifies, we believe that serving it with a diverse group of employees enhances satisfaction," Costco's board wrote, defending its DEI practices. "Having diversity in our supplier base, including appropriate attention to small businesses, is beneficial for many of the same reasons diversity benefits our company. We believe that it fosters creativity and innovation in the merchandise and services that we offer our members."
The board's response prompted some activists to call on customers to cancel their memberships at the major retail wholesaler. Others urged consumers to shop at a competitor, such as Sam's Club, until the board supports softening DEI hiring policies at the company.
"For now, I suggest conservative consumers find other places to spend their money if Costco is so dedicated to doubling down on DEI. If they're smart, Costco will do right by their shareholders and change before we turn our attention to them," anti-DEI activist Robby Starbuck wrote on X last week.
"I fully endorse canceling memberships at this point," he added in a subsequent post.
Costco did not respond to Fox News Digital's inquiry about whether they've sustained a significant number of member cancelations over the past two weeks.
Their unwavering DEI position, however, has seemingly upset some purported shareholders online.
"I'm a Costco member and shareholder and I say that s--- has got to go," one user posted.
"As a shareholder, I'm voting to end this 'program,' another user wrote,
"Obviously, the Board at Costco is extremely Woke and needs to go. I don't shop there but I have been a long-term shareholder. I will vote accordingly," one person commented.
"It’s time to call out Costco for the board's refusal to drop their DEI policy," a user said. "I plan to vote all of my shares at the shareholder meeting on January 23 against this stupid policy."
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Proponents of Costco's DEI policy hailed the wholesaler's board of directors for clinging to DEI at a time when it's becoming increasingly unpopular to do so.
Costco did not respond to Fox Business News' request for comment. When reached for comment, Raikes said the board's position on DEI was "unanimous" and directed FBN to their letter without further comment.
Fox Business' Danielle Wallace contributed to this report.