Money & The Economy

Cereal Giant’s Shareholders Reject Proposal For Audit Of ‘Equity’ Policies Despite Discrimination Complaints

Kellogg’s shareholders rejected a proposal to commission an audit of its equity policies to determine whether they discriminate against certain employees at its annual shareholder meeting Friday.

Kellogg’s Board of Directors recommended opposing the proposal by the National Center for Public Policy Research (NCPPR), saying it disagrees that there is concern that diversity, equity and inclusion “programs and practices themselves are deeply racist, sexist, [and] otherwise discriminatory.” The cereal giant has pledged to meet demographic hiring goals that may discriminate against “non-diverse” employees, and NCPPR proposed an audit analyzing the impacts for such policies.

“Shareholders deserve an investigation into whether Kellogg’s DEI policies are conflicting with the company’s fiduciary duty to maximize value,” said Brad Anderson, chairman of the Boardroom Initiative. He cited Kellogg’s pledge for 50% of its global employees at the management level and above to be female by 2025, which the company reached early in December 2022, according to its website.

He asked in the email obtained by the Daily Caller News Foundation if this comes at the cost of not enlisting the best person for the job.

Anderson also noted the company’s pledge to hire 25% “racially underrepresented” employees at the management level by the end of 2025, asking if this violates federal antidiscrimination laws that could make Kellogg’s vulnerable to costly legal action.

“If these practices are so great and so vital, there should be nothing for the Company to hide, right?” asked Ethan Peck, associate for the Free Enterprise Project asked in NCPPR’s supporting statement to the proposal obtained by the DCNF. “Then why has the Board advised shareholders to vote against our proposal to audit them?”

The proposal said “an independent and unbiased third party with input from civil rights organizations, public interest litigation groups, employees and shareholders of a wide spectrum of viewpoints and perspectives” can commission the audit. The company should make an affordable report on the audit and share it publicly on Kellogg’s website, according to the proposal.

Kellogg’s said in its opposition statement that it recommends voting against the proposal because it already has evaluations and reporting related to “non-discrimination, equity and civil rights,” so the proposed audit is pointless. Additionally, it says, “Kellogg’s policies prohibit any form of discrimination on the basis of race, gender, sexual orientation, national origin, veteran status, disability, pregnancy or any other basis prohibited by law.”

The proposal alleges that Kellogg’s has devalued merit by promoting equity.

“Kellogg’s seeks to assure that employees across the Company are paid and rewarded based on legitimate, non-discriminatory factors including merit,” Kellogg’s Board responded in its opposition statement.

Kellogg’s did not immediately respond to the DCNF’s request for comment.

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