Wall Street's latest DEI move sparks fresh controversy: 'They have decided not to care'

Corporate America is increasingly hiring - or rehiring - middle-aged white men to fill its CEO positions. 

After calls for increased diversity among the leadership roles in America's largest companies, it appears that movement is now reversing. 

Companies including CVS and Starbucks have recently replaced their chief executives - a white woman and an Indian-American man, respectively - with white men. 

Sportswear company Under Armour replaced its female CEO with a man this past spring, while two white men are currently tasked with choosing the next boss at Disney.  

At the same time, firms such as John Deere and Harley-Davidson have publicly backtracked on diversity, equity, and inclusion (DEI) policies. 

And with Donald Trump winning a second term as President, many other companies and government agencies will likely soon follow suit and backtrack on diversity policies.

Of course, the middle-aged white male boss is nothing new - and the number of women and people of color in top executive roles at major companies has always been thin. 

Just 52 businesses in the Fortune 500 ranking were run by women in 2024, and there were just eight black CEOs in the group, CNN reported. 

'But a rash of recent leadership shakeups illustrates the enduring power of the White Guy as a kind of capsule wardrobe for corporate leadership,' Allison Morrow, senior writer for CNN Business, wrote. 

Nani Vishwanath, consultant and facilitator at DEI consulting company The Courage Collective, told DailyMail.com that companies which instated DEI initiatives on a surface level are now finding them easy to remove. 

'In 2020, we saw a lot of organizations reactively put DEI initiatives in place, knowing that there was a higher degree of public accountability around this topic and conversation, and companies wanted to be on the right side of history,' she said.

Following the murder of George Floyd in Minneapolis in May 2020, and the global protests that ensued, many companies rushed to make their leadership more inclusive.

'It's a cyclical world where those who don't have to care, or have decided not to care, will suddenly have their eyes opened at any given moment in time,' Vishwanath said.

'What we see now is that when something of that surface level is enacted and then there is pushback like we've seen now a few years later, it's really easy for these companies to quickly remove these initiatives because they weren't deeply integrated from the get go.'

Many of those who were quickly placed in these roles were left without support they needed, she said, and a lot of those positions have been terminated a few years later. 

If companies decide to add things 'in the moment' then it is much easier to remove the rules and probably not get as much scrutiny, she added.

CNN's Morrow echoed these comments, writing that giant US businesses have begun to 'revert to muscle memory.' 

'There may have been a moment, circa 2020-2022, when replacing a person of color or a woman with a white man may have sparked a public relations debacle.

'Clearly, major companies don't seem to be sweating the optics anymore,' she wrote.

The CEO turnover rate has been historically high in 2024 - with some 1,450 announcing their departure so far. 

That's up 15 percent on the same period last year, and a highest year-to-date total on record, according to research from executive coaching and outplacement firm Challenger, Gray & Christmas.

In August, the rate of new CEOs who are women fell to 27.2 percent, compared with 28.9 percent the year prior, the research found.

Sportswear company Under Armour, for example, replaced CEO Stephanie Linnartz just over a year after she took up the position with founder Kevin Plank. 

This was despite his first stint as chief executive being marred with accusations that he and other male executives had a habit of charging strip club visits to their corporate cards - and a settlement with the Securities and Exchange Commission over allegedly misleading investors about sales growth.

CVS Health CEO Karen Lynch also stepped down last month as the company grapples with falling sales. 

She has been replaced by David Joyner, who previously served as executive vice president of CVS Health and president of CVS Caremark. 

Starbucks, meanwhile, gave Indian-American Laxman Narasimhan the boot earlier this year after a year and a half as CEO.

The chain, which has seen sales plummet in recent months, placed former Chipotle chief executive Brian Niccol in the top spot instead.

Part of that succession involved Mellody Hobson, the first black woman ever to chair an S&P 500 company, ceding her director seat to Niccol, CNN reported.

And at Disney, CEO Bob Iger and newly-appointed ex-Morgan Stanley executive chair James Gorman - both white males - are in the process of deciding who takes over the company's top role in 2026.

Many argue that companies turning their backs on strategies to promote diversity will limit opportunities for those who face disadvantages because of their sex, their skin color or their background.

It is also bad for business, Vishwanath said. 

'The world is evolving whether folks want to admit it or not,' she told DailyMail.com. 'We see rapidly changing demographics in the workforce and in our consumer behavior. 

If organizations want to remain relevant, then that is something they need to be thinking about, she said.

'And if you're developing products or business strategy that's built with only a narrow few identities in mind, relevance is going to be a problem for you with the consumer base as well.'

In a CNN interview in October, Ken Frazier, who served as CEO of Merck between 2011 and 2021 and was the first black chief executive of a major pharmaceutical company, said: 'At its best, DEI is about developing talent, measuring it in a fair way and finding hidden talent and disadvantaged talent in a world where not everybody has an equal chance to exhibit their abilities.'

He added that businesses will miss the best talent unless they go out of their way to develop strategies to cultivate leaders who have faced discrimination - especially those based on America's 'tortured history around race.' 

In September, a group of national civil rights organizations urged business leaders not to abandon DEI initiatives in an open letter. 

'Recently, some CEOs have caved and announced their company's divestment from diversity, equity and inclusion efforts,' the Human Rights Campaign, NAACP, the National Organization for Women and 17 other groups wrote.

'These capitulations weaken businesses and the American economy more broadly. And, these shortsighted decisions make our workplaces less safe and less inclusive for hard-working Americans,' the letter read.

But critics of the initiatives say it is a form of reverse discrimination that unfairly blows back on straight, white men.

Others say DEI schemes may be well-intentioned, but seldom achieve their desired goals and often make things worse by stirring up divisions in offices and classrooms.

Alongside tractor firm John Deere, Harley-Davidson backtracked on its DEI policies in August, after some furious bikers had turned on the company's boss for 'going woke.' 

'We have not operated a DEI function since April 2024, and we do not have a DEI function today,' the company said in a statement at the time.

'We do not have hiring quotas and we no longer have supplier diversity spend goals.'

Meanwhile, big technology companies are defying Nasdaq's push to 'diversify' their white, male boardrooms.

The discount website Groupon, casino owner Red Rock Resorts and others have reported that they are not meeting the stock exchange's DEI regulations.

Nasdaq required thousands of companies to have at least one woman, minority or LGBTQ+ director by the end of 2023 - or else explain why not.