NET WORK
EMERGING TRENDS SERIES TRENDS IN ANTI-DISCRIMINATION
Brenda Lee, Partner, WilmerHale
EXECUTIVE SUMMARY
EMERGING TRENDS SERIES NETWORK
Emerging Trends in Trends in Anti-Discrimination WilmerHale’s Brenda Lee BIHC recently spoke with Brenda Lee, vice chair of WilmerHale’s Anti-Discrimination practice and a member of the Investigations and Criminal Litigation group, based out of the firm’s Washington, D.C. office.
Q: W hat are the main trends you see in the corporate anti-discrimination space, and what is driving these trends?
A: A major trend is the growing number of ESG-
related shareholder proposals, especially focused on the “S” (social). In recent years, there has been an increasing number of proposals for companies to release data on pay equity and board and workforce diversity. Starting last year, in the 2021 proxy season, a new phenomenon was shareholder proposals calling for companies to retain third parties to conduct racial equity or civil rights audits. This approach gained momentum this proxy season, with 40 companies receiving proposals calling for these audits, compared to only 13 last year. None of last year’s proposals passed, but this year eight proposals did. Another development this season was the emergence of what I’ll call “anti-ESG” proposals received by a number of companies. Labeled as nondiscrimination proposals, these argue that anti-racist programs are discriminatory against employees who are deemed “non-diverse.” These proposals were all unsuccessful. Shareholder proposals typically mirror public dialogue. Shareholders, consumers, regulators, and other external stakeholders are increasingly focused on ESG issues. And with respect to racial equity more specifically, it isn’t surprising that there
has been a dramatic increase in proposals for equity audits following George Floyd’s murder and the Black Lives Matter movement. Many of the proposals reference these recent events explicitly in explaining the basis for the proposed audit.
Q: W hat are considerations and best practices for GCs and boards around antidiscrimination proposals?
A: Leaders should be thinking about how to
engage proactively on these issues rather than waiting for a shareholder proposal to emerge. It is a mistake to assume that a proposal that fails one year will not return the next season. At a minimum, companies should consider whether any statements or commitments they make on ESG are inconsistent with their practices and think through any areas of the business that may benefit from a review through an equity or civil rights lens. Some companies are choosing to conduct racial equity and civil rights audits voluntarily, which gives the company more control over the scope and timing of the review.
Q: W hy should GCs look to outside counsel for help?
A: Experienced outside counsel can help
companies think through how to engage most effectively on ESG issues and, if a company decides to conduct a racial equity or civil rights audit, help in considering the scope, timing, and output. WilmerHale has conducted these kinds of reviews and assessments for many companies and brings deep experience engaging in civil rights issues. GCs need to stay mindful that these issues are not going away—the emerging anti-ESG trend shows the pressure that companies may receive from different sides—and that meaningful engagement on these issues can benefit their companies.
EMERGING TRENDS INTERVIEW SERIES
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EMERGING TRENDS SERIES NETWORK About the BIHC Network & Emerging Trends The Black In-House Counsel (BIHC) Network works with legal departments and law firms to advance Diversity, Equity, and Inclusion in the legal profession. We create content, events, networks, and professional development training for corporate legal departments and law firms. A key part of our mission is to showcase the talents of leading lawyers of color in top law firms to in-house legal departments. Emerging Trends features insights from leading partners of color on key trends shaping the business landscape over the next 12 months. Each Emerging Trends briefing provides concise information on what general counsel and boards need to know about and best practices in how to approach this topic.
BIHC is pleased to hear from the following WilmerHale partners in the Emerging Trends Series:
Robert Boone
Brenda Lee
Partner
Partner
NEW YORK Complex Litigation and Investigations
WASHINGTON, D.C. Anti-Discrimination
Stephanie Evans
Andre Owens
Partner
Partner
WASHINGTON, D.C. Corporate Transactions
WASHINGTON D.C. Securities Trading and Markets Activities EMERGING TRENDS INTERVIEW SERIES
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