American Express Drops Formal Board Diversity Criteria After NLPC Agreement
American Express agreed in October to remove formal board diversity criteria as part of an NLPC-led shareholder proposal, joining Deere & Company and Johnson & Johnson in dismantling DEI benchmarks. The shift reflects pressure from conservative activists and follows executive orders labeling DEI mandates illegal, pushing the financial sector to revert to traditional governance structures.
1. Policy Reversal at American Express
In October, American Express entered into a formal agreement with the National Legal and Policy Center to remove specific board diversity criteria from its director selection process. This move aligns AXP with Deere & Company and Johnson & Johnson, which have already amended their governance rules to eliminate DEI benchmarks.
2. Activist Pressure and Legal Landscape
The NLPC spearheaded targeted shareholder proposals arguing that identity-based mandates undermine merit-based selection. Executive orders issued by the current administration have classified formal DEI requirements as illegal, leading more corporations to reassess and retract diversity policies under legal and political scrutiny.
3. Industry Implications and Investor Sentiment
As major financial and industrial firms reconsider diversity mandates, traditional governance frameworks are regaining prominence. Investors focused on ESG metrics may reevaluate their positions, while companies like Goldman Sachs weigh similar board governance changes in response to evolving regulatory risks.