Ford Motor Co: Disclosure of Key Diversity and Inclusion Metrics

WHEREAS: In August 2024, Ford Motor Company linked the need to be “mindful that our employees and customers hold a wide range of beliefs” to an apparent substantive shift in its diversity, equity, and inclusion (DEI) strategy. Announced changes included: no longer participating in the Human Rights Campaign (HRC)’s survey on corporate practices related to lesbian, gay, bisexual, transgender, and queer (LGBTQ+) employees; not linking compensation to diversity goals; and changing the focus of employee resource groups.[1]

Many investors view a company’s management of DEI-related strategies as a material topic. If Ford has dismantled DEI policies and practices, this may expose it to legal, financial, and reputational risks that will undermine its long-term growth.

Legal:

Racial and gender discrimination is prohibited under the Civil Rights Act of 1964. Companies must maintain harassment policies that are “reasonably designed and reasonably effectual.” If an employer should have known that harassment was taking place, it can be held responsible. Reducing or eliminating DEI initiatives might indicate a lack of corporate commitment to managing discriminatory behavior.[2]

Financial:

Research studies indicate that investors benefit from companies with management diversity.

For example, McKinsey studies have consistently found that companies with higher diversity in corporate leadership are more likely to outperform peers in profitability.[3] A review by As You Sow and Whistle Stop Capital of the manager diversity of over 1,600 companies found statistically significant positive correlations to key financial performance indicators, including: return on equity and invested capital, revenue growth, and share price performance.[4]

A 2024 meta-analysis found that companies with diversity and inclusion initiatives experience benefits that include: increased innovation, enhanced employee engagement and satisfaction, and improved decision-making.[5]

Long-term growth:

HRC estimates that LGBTQ+ Americans have spent an estimated $103 billion on vehicles since 2020.[6]

According to a 2024 Gallup poll, almost eight percent of Americans currently identify as LGBTQ+. However, more than 20 percent of Gen Z adults identify as such.[7] With each of the last five generations, the percentage of Americans identifying as LGBTQ+ has doubled,[8] indicating that Gen Alpha will have an even stronger association than Gen Z.

Alienating the LGBTQ+ population, along with their allies, risks serious, long-term brand harm for Ford.

BE IT RESOLVED: Shareholders request that the Board prepare and issue a report describing the research and analysis it undertook before making changes to its DEI policies and practices in Summer 2024. The disclosure should be made at reasonable expense, excluding proprietary or privileged information.

SUPPORTING STATEMENT: Shareholders suggest the report include, at Board discretion: