The good, the bad and the ugly of DEI

OVER the past two decades, Diversity, Equity and Inclusion (DEI) has moved from the periphery of corporate discourse to become a key concern in boardrooms.

At its core, DEI seeks to ensure that organisations embrace a workforce and leadership that reflect a broad range of backgrounds, experiences and perspectives. Diversity relates to representation across gender, race, age, culture and more. Equity ensures fair access and opportunities for all, while inclusion fosters environments where different voices are valued and heard.

Modern DEI traces its roots to the civil rights movements in the 1960s when the focus was primarily on racial and gender inequality. Over time, its agenda expanded to cover a wider spectrum of identities and social justice concerns, including age, disability, sexual orientation and socio-economic background.

While the foundational aims of DEI were laudable and necessary, its widening agenda and missteps have polarised public opinion in recent years, with tensions coming to a head following the 2024 election of US President Donald Trump.

What began with good intentions has, in some cases, turned bad and ugly. Boards today must chart a course through this increasingly complex and contested terrain.

The good

At its best, DEI drives fairness, opportunity and social progress by dismantling systemic barriers that have historically disadvantaged minority and vulnerable groups.

Beyond its social purpose, effective DEI practices strengthen organisational resilience and innovation. Inclusive cultures foster creativity, adaptability and engagement – traits critical for success in today’s volatile and complex environment.

For boards, the benefits of diversity are well-documented. Studies show that diverse boards are less susceptible to groupthink and better positioned to assess risk and respond to stakeholder needs. Boards that reflect the diversity of their customers, employees and investors also enjoy greater trust, relevance and legitimacy.

Affirmative efforts to address imbalances have yielded tangible results. In Singapore, for instance, women represented only 8.3 per cent of directors on listed boards in 2013, even though they made up 21.2 per cent of senior management ranks (Gender Diversity on Boards, Diversity Task Force, 2014).

Following sustained efforts by regulators and advocacy groups, this figure rose to 18.1 per cent at the end of 2024 (Singapore Diversity Review 2025, Council for Board Diversity, 2025).

The bad

No doubt, there have been challenges in implementing DEI. Chief among them are perceptions of tokenism and concerns over compromising meritocracy.

A case in point is Norway, the first country to introduce mandatory gender quotas. In 2003, women held just 9 per cent of board seats. The government responded by mandating a 40 per cent quota for publicly-listed boards. While the target was met relatively quickly by 2008, studies found that many women directors were drawn from a limited pool, leading to the phenomenon of “golden skirts” (a small group of women serving on multiple boards), in effect, creating an outcome similar to the traditional “old boys’ network” for men on boards.

Meanwhile, research into the effects of gender diversity on board governance and company performance has proven inconclusive.

Even without mandated quotas, organisations under pressure to demonstrate diversity may appoint directors for appearance’s sake rather than capability. This box-ticking approach risks undermining credibility, diluting performance and tokenising diversity.

While diversity brings valuable perspectives, it can also expose fault lines. Without strong, inclusive leadership, it can lead to fragmented discussions and strained decisions – delivering optics without improving governance or performance.

The ugly

DEI drew sharper criticism when it became entangled with “wokeism”. Once associated with social justice awareness, the term has evolved into a pejorative for perceived overreach, ideological rigidity and enforced progressive viewpoints.

In the corporate sphere, controversy has arisen around issues such as mandatory pronoun policies, expansive gender identity recognition, and ideological diversity training. These initiatives, though often well-intentioned, have at times alienated employees, customers and shareholders.

The political backlash has been swift. Following his re-election and inauguration in January 2025, President Donald Trump issued executive orders limiting DEI programmes within federal agencies and among contractors. His administration also implemented funding cuts to roll back DEI initiatives in universities and research institutions.

Some high-profile companies, including Disney, Meta, Amazon and Verizon, have ended or scaled back their DEI programmes in response to cost and political pressures. Many others have quietly retreated from expansive efforts, wary of political crossfire.

Whither DEI?

Boards now face a delicate balancing act: do too little and risk alienating progressive stakeholders, or do too much and provoke backlash from others.

The era of uncritical DEI enthusiasm is clearly fading. Yet the core principles of fairness, opportunity and inclusion remain essential to good governance.

Boards should respond not with reactive gestures but with thoughtful, principled leadership. They can continue to champion diversity while upholding merit, ensuring that director appointments bring strategic value rather than serving merely symbolic purposes.

For companies committed to building inclusive and equitable workplaces, the traditional policy-driven DEI model is not the only way forward. Organisations can embed inclusive leadership practices, integrate DEI into core business strategy, support employee-led initiatives, and foster a culture of belonging that transcends identity politics.

Above all, DEI efforts must be anchored in clear objectives and measurable outcomes – where impact, not ideology, is the primary benchmark.

The writer is Past Chairman of the Singapore Institute of Directors.