Undoing DEI: The Flawed Logic of Corporate Backtracking

Over the past two weeks, media outlets have been flooded with reports of a widespread retreat from Diversity, Equity, and Inclusion (DEI) initiatives, as many major multinational corporations scale back or even scrap them entirely.

One such article, published last week by the BBC – and which prompted me to write this piece – reported that a global investment bank has scrapped its ‘diversity rule’, under which it would only help a company sell shares on the stock market if its board had at least two diverse members, including at least one woman. A spokesperson from the organisation justified its decision by stating:

 "That policy was put in place to try and drive a change in behaviour and I think that's happened." … “I think it has served its purpose." [1]

Diversity, of course, extends far beyond gender – one of the specified criteria within the axed policy. However, gender remains one of the most researched aspects of workplace diversity, particularly in leadership, and examining the implications of rolling back DEI policies like this through a gender diversity lens can provide valuable insights into the broader consequences of such abrupt corporate backpedalling.

If, as the company spokesperson claims, behaviour change is the goal of DEI policies, can we really say they’ve ‘served their purpose’ simply because some positive progress has been made? And even if the desired behavioural changes have fully taken root, can those changes be sustained long-term if DEI programs are abolished?

The illusion of progress

Let’s start by looking at the numbers to examine whether DEI has really 'served its purpose', at least in terms of gender diversity in the UK, where women have had equal or nearly equal access to education for decades.

At first glance, board diversity numbers look impressive: in 2024, women held 42% of FTSE* 250 board seats and 43% of FTSE 100 board seats. On the surface, at least, this is a significant leap from just 12.5% in 2010. But here’s the rub: most of these gains have come from non-executive directorships, i.e. positions with less direct influence over corporate strategy and decision-making.

According to research from Cranfield University and EY, the number of women holding executive directorships in FTSE 250 companies has actually declined by 11% since 2022, and now stands at just 12%. The picture worsens at the very top: as of 2024, only 9% of FTSE 100 CEOs, and just 4% of FTSE 250 CEOs are women [2, 3, 4].

True Diversity, Equity, Inclusion, and even Belonging (the missing ‘B’ in DEI, but more on that later) goes beyond who gets a seat at the table, to ensuring that those seats come with real influence, and that the seat-holders feel accepted, secure and supported. Without meaningful representation in executive leadership, these gains risk being symbolic rather than substantive.

Instead of scrapping its diversity rule altogether, a smarter move for this company could have been to evolve its DEI strategy, building on successes, acknowledging its shortcomings, and learning from the evidence. Now is the time for evolution, not retreat.

"Instead of scrapping its diversity rule altogether, a smarter move for this company could have been to evolve its DEI strategy, building on successes, acknowledging shortcomings, and learning from the evidence. Now is the time for evolution, not retreat."

But this is not the only company retreating from DEI. Far from it. Many are going much further, not just rolling back specific policies but dismantling entire DEI programs, defunding initiatives, and even eliminating dedicated DEI roles altogether [50]. Beyond claims that DEI efforts have 'served their purpose', many companies justify these rollbacks in the name of meritocracy. It’s a narrative that has gained traction in media coverage in recent weeks. But this raises a more fundamental question: Has the workplace ever truly been a meritocracy to begin with?

If hiring and promotion decisions were truly meritocratic, wouldn’t we expect to see a greater share of women in executive leadership by now? After all, girls have outperformed boys at nearly every stage of education in the UK for decades. Data from the Department for Education shows that girls gain higher grades than boys in nearly every GCSE subject, and continue to lead at A-Level [5]. Indeed, the trend carries through to higher education with women more likely to attend university, graduate, and earn first-class or upper-second degrees than their male counterparts [6].

This disparity between women's educational achievements and their underrepresentation at the most senior levels is a strong indication that merit alone has never dictated career progression. The reality is far more complex. Structural barriers and inequities, along with cognitive biases - both implicit and explicit - feed and sustain the persistent glass ceiling.

"This disparity between women's educational achievements and their underrepresentation at the most senior levels is a strong indication that merit alone has never dictated career progression ... Structural barriers and inequities, along with cognitive biases - both implicit and explicit - feed and sustain the persistent glass ceiling."

The Paradox of Meritocracy

The notion of meritocracy suggests that success in the workplace should be determined solely by one's ability and achievements. It’s an appealing idea. Yet, in practice, the ideal rarely holds up. When we examine the origins of the term, cracks begin to show.

The term 'meritocracy' was first coined in the 1950s in Michael Young’s satirical book, The Rise of the Meritocracy. Far from advocating for it, Young’s work served as a warning, highlighting how those in power can come to see their success as purely merit-based, blinding them to structural barriers and ultimately entrenching, rather than eliminating, inequities [7].

Although Young’s critique predated modern psychological research, he arguably anticipated what scholars now call the Paradox of Meritocracy - the idea that believing in a meritocratic system can actually make inequality worse by masking the biases that persist within it.[8]

Indeed, extensive academic research suggests that, without evidence-based DEI interventions, hiring, promotion, and performance evaluations are often influenced by cognitive biases, which can be both implicit and explicit [9], rather than being based purely on merit.

Tackling Implicit Bias: The Role of Evidence-Based Interventions

Managers with implicit biases may not see themselves as prejudiced, or may try to paint a public picture of themselves as inclusive [10]. Nonetheless, they may make non-meritocratic, or even discriminatory hiring, performance evaluation and promotion decisions due to implicit stereotype associations such as:

• The representativeness heuristic (associating specific traits and jobs with stereotypes);

• Affinity bias (the tendency to favour people that are similar to you);

• The ultimate attribution error (the tendency to attribute men’s success to inherent ability or skill, while putting women’s down to luck or task simplicity). [11, 12, 13, 14, 15]

Many evidence-based DEI interventions aim to mitigate these systematic biases and improve decision-making processes. In hiring, these include anonymising résumés to overcome the representativeness heuristic and replacing unstructured interviews with structured ones [16, 17, 18]. Using an interview selection checklist helps engage the reflective system, while assessing candidates jointly rather than individually drives more reasoned choices [19, 20, 21, 22]. To prevent decision fatigue, managers should limit the number of interviews they conduct [23, 24]. In later hiring stages, introducing cognitive ability and work sample tests helps ensure more objective selection decisions [25, 26].

For performance evaluation and promotion decisions, similar biases can persist. Standardising evaluations with specific, measurable criteria makes decision-making more objective and helps counter implicit stereotype associations that lead to vague, less actionable feedback for women, leaving them less equipped to advance [27, 28]. Involving employees in selecting performance measures and their weighting further clarifies expectations and can lead to fairer performance outcomes [29].

This is not an exhaustive list of interventions, nor is there a single solution or magic formula. Every intervention has its limitations [30]. Nonetheless, the very fact that study after study confirms they consistently minimise bias and often change decision outcomes underscores a crucial point: if outcomes can be altered, then meritocracy was never the baseline.

The challenge, however, is sustainability. As soon as you remove these interventions, the biases are likely to return [31].

"... if outcomes can be altered, then meritocracy was never the baseline. The challenge, however, is sustainability. As soon as you remove these interventions, the biases are likely to return."

Explicit Bias, Structural Inequities, and the Case for Quotas

Not all non-meritocratic or even discriminatory decisions stem from implicit biases. Some are deliberate. Role congruity bias, for instance, while often implicit, can also be explicit. This is the tendency to see women as less suited for leadership positions because they don’t appear to match stereotypical leadership traits [32].

Managers with explicit beliefs will be aware of their prejudices. Often these beliefs will stem from societal norms about gender roles, or cultural beliefs about gender competencies and stereotypical gender traits. Sometimes these beliefs will be self-serving, for instance where men view women in the workplace as encroaching on their territory [33]. In perpetuating discriminatory hiring and promotion practices, such leaders are acting - as my economist colleagues might say - in accordance with expected utility theory [34]. Or, in plain English: they prioritise self-interest over true merit.

That’s where the case for quotas comes in. While often debated, well-designed gender quotas have been shown to be an effective tool not only for achieving diversity targets but also for addressing structural inequities that limit access to leadership opportunities. Studies indicate that quotas not only help organisations meet diversity goals but also have the broader impact of weakening stereotypes through positive exposure to female leaders and inspiring the next generation of young women [35, 36, 37, 38].

And that’s important, not just because DEI remains a moral imperative, but also because it continues to make business sense, even as recent academic research debates the strength of earlier studies on the direct link between demographic diversity and financial performance [39]. The fact is that there is still no evidence that diversity harms business outcomes, and plenty of evidence to indicate that diversity in perspectives, ways of thinking, and values fuels innovation, a key driver of long-term business success [40].

Recent high-end research into workplace wellbeing also finds that Inclusion, and critically, Belonging (that missing ‘B’ in DEIB) - where people feel accepted, secure, and supported to be their authentic selves [41] - are disproportionately large drivers of employee wellbeing [42, 43]. This is a crucial consideration for business outcomes, as we now have causal field evidence that a happier employee is a more productive employee [44]. Perhaps even more compelling, the latest high-end research shows that companies with higher workplace wellbeing scores perform better in talent attraction, retention, and even financial and stock market performance [43, 45, 46, 47]. Rather than retreat from DEI, now is the time for it to evolve into DEIB.

The Verdict: DEI matters more than ever before, but DEIB is the future...   

Scrapping DEI policies, programs, and teams on the grounds that they have ‘served their purpose,’ or abandoning them in the name of meritocracy, is a fundamentally flawed rationale. It ignores the persistent biases, structural barriers and inequities that continue to keep women and other underrepresented groups locked out of leadership and decision-making roles.

We stand at a crossroads. Retreating from DEI now would not just stall progress, it’s likely to reverse it. The advances we have seen are not accidental, they are the result of deliberate, evidence-based action. But even sustaining progress isn’t enough. DEI must evolve.

That means moving beyond surface-level wins on Diversity (the ‘D’ in DEI) to tackling the deep-rooted barriers that persist, so that an individual's identity no longer predicts their opportunities (the ‘E’). It also means ensuring that those who have a seat at the table have a voice, are heard, and have real influence (the ‘I’) [48, 49]. And critically, it means embedding Belonging (the ‘B’), because if business success is the goal, then Belonging is a key driver - but it’s hard to achieve the ‘B’ without first getting DEI right.

In finishing, I’m reminded of a well-loved poem by Rudyard Kipling, which says, "If you can keep your head when all about you are losing theirs" … "yours is the Earth and everything that’s in it." As more media reports roll in, some telling of organisations abandoning DEI, others of those standing by it, others still of those visionaries evolving to DEIB, I can't help but see parallels. Those with the courage, conviction and vision to forge forward, even as others retreat, won’t just weather the storm; they’ll be the ones shaping the future.

*Indices of the UK’s largest publicly traded companies

Resources and further reading

1. Jack, S., & Jordan, D. (2025, February 12). Goldman Sachs axes diversity rule that has “served its purpose.” BBC News. https://www.bbc.co.uk/news/articles/c4gwvxn5377o

2. Cranfield School of Management. (2024, November 26). Women in executive roles on FTSE 250 boards has fallen since 2022, despite 70% of companies meeting targets. Cranfield University. https://www.cranfield.ac.uk/som/press/women-in-executive-roles-on-ftse-250-boards-has-fallen-since-2022-despite-companies-meeting-targets

3. EY. (2024, November 26). Two-year decline in number of female executives. EY.   https://www.ey.com/en_uk/newsroom/2024/11/two-year-decline-in-number-of-female-executives

4. Partridge, J. (2024, November 26). Female executive directors in FTSE 250 down 11% since 2022. The Guardian. https://www.theguardian.com/business/2024/nov/26/female-executive-directors-in-ftse-250-down-11-since-2022

5. UK Parliament Committees. (2024, April 19). Why do boys lag behind girls at all ages of education? MPs to Investigate. UK Parliament Committees. https://committees.parliament.uk/committee/203/education-committee/news/200976/why-do-boys-lag-behind-girls-at-all-ages-of-education-mps-to-investigate/

6. Holland, C., & PA Media. (2024, January 15). Cambridge study finds girls outperform boys at school. BBC News. https://www.bbc.co.uk/news/uk-england-cambridgeshire-67935359

7. Young, M. D. (1958). The rise of the meritocracy. Thames and Hudson.

8. Castilla, E. J., & Benard, S. (2010). The Paradox of Meritocracy in Organizations. Administrative Science Quarterly, 55(4), 543–576.

9. Ajzen, I., & Dasgupta, N. (2015), p. 132. Explicit and Implicit Beliefs, Attitudes, and Intentions. In The Sense of Agency. Oxford University Press.

10. Latu, I. M., Stewart, T. L., Myers, A. C., Lisco, C. G., Estes, S. B., & Donahue, D. K. (2011). What We “Say” and What We “Think” About Female Managers: Explicit Versus Implicit Associations of Women With Success. Psychology of Women Quarterly, 35(2), 252–266.

11. Kahneman, D. (2011), p.150. Thinking, fast and slow. Penguin Random House.

12. Powell, G. N., & Butterfield, D. A. (2015), p. 315. The glass ceiling: what have we learned 20 years on? Journal of Organizational Effectiveness : People and Performance, 2(4), 306–326.

13. Rivera, L. A. (2012). Hiring as cultural matching: The case of elite professional service firms. American Sociological Review, 77(6), 999–1022.

14. Hamilton, O. S., & Lordan, G. (2023). Ability or luck: A systematic review of interpersonal attributions of success. Frontiers in psychology, 13, 1035012.

15. Bertrand, M. (2016), pp. 81-83. Field Experiments on Discrimination. National Bureau of Economic Research.

16. Goldin, C, & Rouse, C (2000). Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians. The American Economic Review, 90(4), 715-741.

17. Åslund, O., & Skans, O. N. (2012). Do Anonymous Job Application Procedures Level the Playing Field? ILR Review, 65(1), 82–107. 

18. Macan, T. (2009). The employment interview: A review of current studies and directions for future research. Human Resource Management Review, 19(3), 203-218.

19. Kahneman, D. (2011), pp. 229-232. Thinking, fast and slow. Penguin Random House.

20. Judge, T. A., Cable, D. M., & Higgins, C. A. (2000), p.385. The Employment Interview: A Review of Recent Research and Recommendations for Future Research. Human Resource Management Review, 10(4), 383–406.

21. Levashina, J., Hartwell, C. J., Morgeson, F. P., & Campion, M. A. (2013). The structured employment interview: Narrative and Quantitative Review of the Research Literature. Personnel Psychology, 67(1), 241-293.

22. Bohnet, I., van Geen, A., & Bazerman, M. (2016). When Performance Trumps Gender Bias: Joint vs. Separate Evaluation. Management Science, 62(5), 1225–1234.

23. Bohnet, I. (2016), pp. 3-4. What works: gender equality by design. Harvard University Press.

24. Soll, J. B., Milkman, K. L., & Payne, J. W. (2015). A User’s Guide to Debiasing. In G. Keren & G. Wu (Eds.), The Wiley Blackwell Handbook of Judgment and Decision Making. John Wiley & Sons, Ltd.

25. Bohnet, I. (2016), p. 143. What works: gender equality by design. Harvard University Press.

26. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124(2), 262–274.

27. Correll, S. J., & Simard, C. (2016, April 29). Research: Vague feedback is holding women back. Harvard Business Review. https://hbr.org/2016/04/research-vague-feedback-is-holding-women-back

28. Nittle, N. (2021, April 28). The language of gender bias in performance reviews. Stanford Graduate School of Business. https://www.gsb.stanford.edu/insights/language-gender-bias-performance-reviews

29. Groen, BAC, Wouters, MJF, & Wilderom, CPM (2017). Employee participation, performance metrics, and job performance: A survey study based on self-determination theory. Management Accounting Research, 36, 51-66

30. Waylen, G. (2018), p.176. Nudges for gender equality? What can behaviour change offer gender and politics? European Journal of Politics and Gender, 1(1), 167–183.

31. Hertwig, R., & Grüne-Yanoff, T. (2017). Nudging and Boosting: Steering or Empowering Good Decisions. Perspectives on Psychological Science, 12(6), 973–986.

32. Eagly, A. H., & Karau, S. J. (2002). Role congruity theory of prejudice toward female leaders. Psychological Review, 109(3), 573–598. 

33. Bobbitt-Zeher, D. (2011). Gender Discrimination at Work: Connecting Gender Stereotypes, Institutional Policies, and Gender Composition of Workplace. Gender \& Society, 25(6), 764–786.

34. Powell, G. N., & Butterfield, D. A. (2015), p.309. The glass ceiling: what have we learned 20 years on? Journal of Organizational Effectiveness : People and Performance, 2(4), 306–326.

35. Grindstaff, L. (2022). Barriers to inclusion: Social roots and current concerns. In L. F. Bisson, L. Grindstaff, L. Brazil-Cruz, & S. J. Barbu (Eds.), Uprooting bias in the academy (pp. 19–44). Springer.

36. Beaman, L., Chattopadhyay, R., Duflo, E., Pande, R., & Topalova, P. (2009), p.1533. Powerful Women: Does Exposure Reduce Bias? The Quarterly Journal of Economics, 124(4), 1497–1540.

37. Bertrand, M. (2016), p.57. Field Experiments on Discrimination. National Bureau of Economic Research.

38. Waylen, G. (2018) pp.171 & 177. Nudges for gender equality? What can behaviour change offer gender and politics? European Journal of Politics and Gender, 1(1), 167–183.

39. Schrager, A. (2025, February 3). DEI can be justified, but not by better profits. Bloomberg. https://www.bloomberg.com/opinion/articles/2025-02-03/dei-can-be-justified-but-not-by-better-profits

40. Wang, J., Cheng, G. H.-L., Chen, T., & Leung, K. (2019). Team creativity/innovation in culturally diverse teams: A meta-analysis. Journal of Organizational Behavior, 40(6), 693–708.

41. Cornell. (n.d.). Sense of Belonging. Belonging at Cornell.

42. Cotofan, M., De Neve, J.-E., Golin, M., Kaats,  M., & Ward, G. (2021). Chapter 7: Work and well-being during COVID-19: impact, inequalities, resilience, and the future of work. World Happiness Report.

43. Neve, J. D., & Ward, G. (2025). Why workplace wellbeing matters: The science behind employee happiness and organizational performance. Harvard Business Review Press.

44. Bellet, C.S., De Neve, J-E., & Ward, G. (2023). Does employee happiness have an impact on productivity? Management Science.

45. Jack, A. (2023, May 24). Happy staff often make for satisfied shareholders, study finds. Financial Times. https://www.ft.com/content/b97bc980-8bc2-412a-b429-a2e836b17cf4

46. De Neve, J-E., Kaats, M., Ward, G. (2023). Workplace Wellbeing and Firm Performance. University of Oxford Wellbeing Research Centre Working Paper 2304.

47. Ward, G. (2022). Workplace Happiness and Job Search Behavior: Evidence From A Field Experiment. MIT Sloan School of Management Working Paper 6607-22.

48. Roberson, Q. M. (2006). Disentangling the Meanings of Diversity and Inclusion in Organizations. Group & Organization Management, 31(2), 212–236.

49. Indeed Editorial Team. (2023, May 23). DEIB+: What It Means, Why It Matters and How to Do the Work. Indeed. https://www.indeed.com/lead/deib-what-it-means-why-it-matters-and-how-to-do-the-work

50. Murray, C., & Bohannon, M. (2025, February 21). Citigroup Rolls Back Diversity Initiatives—Here Are All The Companies Cutting DEI Programs. Forbes. https://www.forbes.com/sites/conormurray/2025/02/21/pepsi-rolling-back-diversity-initiatives-here-are-all-the-companies-cutting-dei-programs/