DEI in Private Company Governance: A Business Imperative or a Political Risk? 

In today's corporate landscape, Diversity, Equity, and Inclusion (DEI) remains a complex and evolving topic for private company Boards. While research suggests that DEI enhances decision-making, innovation and financial performance, it also faces mounting critiques and implementation barriers, particularly as political and legal challenges reshape the conversation. 

To explore these tensions, we spoke with Dr. Anita Polite-Wilson, Southern California Chapter member, Board Director and Diversity, Inclusion and Belonging Consultant, who advises executive leaders and Boards on implementing DEI into governance. Dr. Polite-Wilson provides a candid look at DEI’s business case, the challenges companies face and what Boards should be asking themselves as they navigate this shifting landscape. 

The Business Case for DEI in Governance 

Companies that prioritize DEI initiatives see up to 35% more revenue than those that don’t, according to multiple studies. Dr. Polite-Wilson emphasizes that this isn’t just about ethics—it’s about financial sense. 

"If we don’t understand the different backgrounds and walks of life that we’re marketing to, we’re leaving a lot of money on the table," she explains. Ironically, she points out, many companies readily embrace diversity in investment portfolios while struggling to apply the same principle to their workforce and leadership. 

Beyond financial returns, DEI strengthens corporate governance by enhancing risk management and resilience. A diverse Board can anticipate blind spots, improve problem-solving and prevent reputational missteps. Dr. Polite-Wilson cites Dove, which faced significant public backlash over a controversial ad campaign—one that could have been avoided with a more inclusive decision-making process. 

"Had there been someone in the room to say, ‘This isn’t a good idea,’ they would have saved themselves millions in production costs and a major public relations crisis," she notes.  

The Challenges and Critiques of DEI Initiatives 

Despite the advantages, DEI efforts often encounter skepticism. Dr. Polite-Wilson acknowledges a common critique that many initiatives fail because they are performative rather than transformative. 

"Most DEI programs don’t work because the approach doesn’t work," she explains. "You can’t go around calling people out. Instead, you need to call people into the knowledge of the impacts their decisions have on others." 

Another significant challenge is the shifting political and legal landscape. Several companies and corporations have scaled back their DEI commitments due to state-level regulations and legal challenges. Companies like Apple, Meta and Target have been caught between political pressures and stakeholder expectations, forcing them to reconsider their approaches. 

Boards as DEI Leaders: The Role of Governance 

Board members play a critical role in shaping a company’s culture, not just by setting policies, but by modeling behavior. Dr. Polite-Wilson stresses that Board leaders must challenge norms and hold leadership accountable for meaningful inclusion efforts. 

She recalls an instance where she pointed out the impact of an executive’s language during a Board meeting, urging them to reconsider referring to staff as "lower-level managers."