PESTS In The Boardroom: Reframing Resistance To Reignite DEI

A practical playbook for leaders to navigate anti-DEI sentiment and drive human capital growth

Practical approaches to increasing diversity, such as setting diversity goals and implementing targets for hiring racialized individuals, are proposed by scholars who argue that societal diversity, racial and otherwise, should be reflected within organizations in the interest of equity and inclusion. While this movement gained traction over the past decade, resistance, as with any systemic overhaul, is inevitable, as noted in “The Evolution of Accounting Science: COVID-19 Pandemic Lessons on Anti-Black Racism” chapter of the newly released book Voices of Change. The five most cited rationales for resisting systemic changes related to anti-Black racism (and other forms of racism) are public interest, equity, supply-side, temporal, and spatial, collectively known as “PESTS,” detailed further in the book’s section, “Rebutting PESTS.” Business leaders with a deep understanding of the rationales for opposing diversity, equity, and inclusion (DEI) initiatives are better equipped to envision and execute long-term human capital strategies that position their organizations for a competitive edge.

 

What Is PESTS Framework?

While resistance to DEI can have many roots, those with the most significant impact on how corporations and government entities approach the concept are: 

● Public Interest 

This argument hinges on the idea that diversity is counter to the “public” interests of society. In reality, there is no objective concept of the public interest. The closest proxy is the interest of the government in power—at least until the electorate chooses to replace it. Once a new government takes office, it redefines the public interest according to its agenda, continuing the cycle and explaining the policy shifts that accompany each change in leadership. Canadian and U.S. politicians have invoked the public interest to restrict immigration from certain countries. Similarly, professional organizations may adopt this stance to restrict membership based on nationality, while employers might use it to justify rejecting candidates with primarily international work experience—immigrants. For example, in Canada, employers can legally turn down qualified candidates solely for lacking ”Canadian experience,” effectively legitimizing discriminatory hiring practices against all immigrants. This mindset overlooks the interests of marginalized and often invisible populations within society and directly opposes the effective utilization of human capital.  

● Equity 

Through this lens, opponents of DEI essentially contend that equity is finite—that a diversity hiring initiative aimed at countering anti-Black racism, for instance, could drive up competition between Black and, say, Asian talent. Students for Fair Admissions made this argument in the U.S. Supreme Court case that struck down affirmative action in college admissions. This approach mistakenly categorizes all members of an underrepresented group homogeneously while also frequently exploiting isolated resistance to DEI from within marginalized populations.  

● Supply-side 

Using this strategy, DEI opponents reason that diversity goals outpace the number of qualified people available. Yet, such an argument overlooks that racialized individuals are often invisible to decision-makers, who typically are from non-racialized populations and lack the meaningful inroads with these communities that are critical for advancement. This approach labels qualified racialized hires as “tokens” due to the a priori assumption that a pipeline of capable candidates simply does not exist. This logic was used for years to exclude Black football players from the quarterback position by limiting their draft prospects despite their outperforming non-Black counterparts at every stage of the draft process.

● Temporal

The temporal perspective distances current circumstances from past instances and acknowledgment of racism, neglecting to recognize ongoing, institutionalized impacts. By its nature, this approach attempts to delegitimize the impact of DEI and attempts to trivialize the existence of systemic racism. 

● Spatial

This argument is the opposite of the “grass is always greener” cliché and promotes that racism is worse elsewhere. This stance leans into deflection and distraction to empower people to overlook pervasive racism. 

Today’s business leaders are preparing for continuous disruptions that could impact business strategy, including changing economic conditions, demand spikes, or labor market shifts. Similarly, staying cognizant of the why behind anti-DEI sentiment can enable leaders to strategically prepare for internal and external pressure to change course on DEI. Like any business uncertainty, as leaders strategize for the future of DEI at their organization, it is essential to lean into company values, purpose, and mission. Using these as a North Star to align DEI and business strategy can illuminate the most effective path forward.

The Cyclical Nature of DEI

Regardless of the rationale for opposing anti-racist efforts, it’s critical for business leaders strategizing for impact to consider the long-term view. Sentiment on DEI is far from stationary. History has shown that when the pendulum swings one way on this topic, it will eventually head in the other direction. Shifts in “public interests” caused by changes in governments also make these cycles inevitable.

For instance, after the 2020 murder of George Floyd, corporate support for DEI exploded—likely fueled by a massive anti-racism movement in the United States in contrast to the current anti-DEI climate driven by political policy changes. In 2020, the number of organizations that created chief diversity officer positions increased by a staggering 55 percent. Yet, just four years later, hiring for such roles was down 48 percent year over year. At the same time, nearly half of registered U.S. voters believed corporate DEI initiatives should continue, a figure that rises exponentially among younger Americans, suggesting a future tide change that could again reignite DEI momentum.

Organizations that move too quickly to respond to perceptions of anti-DEI pressure or those that create inflexible strategies put themselves at risk of falling behind when sentiment again inevitably shifts. By neglecting to stay invested in DEI today, companies may struggle to reestablish truly impactful diversity strategies in the future and create systemic barriers to innovation. 

Lean into DEI Today to Protect the Business Tomorrow 

When companies strategically lead with their values to drive DEI progress forward, they take tactical measures to safeguard their future. The bottom-line impact of successful DEI investment tells the story. At companies that intentionally elevate diverse talent into leadership, profitability is almost 40 percent higher than those with leadership ranks lacking diversity. A forward-thinking DEI strategy is also integral for attracting and retaining top talent. Great Place to Work found that organizations that prioritize inclusion see an employee retention rate five times that of other organizations—table stakes in today’s competitive labor market. It is a commitment that will be particularly critical in the years to come, as corporate DEI strategy is a must-have for the youngest entrants to the workforce. 

The recent proliferation of opposition to anti-racist movements through a range of PESTS rationales, coupled with the executive pressure to keep costs down, increases the difficulty of garnering C-suite and board buy-in for taking a long-range view of DEI impact. Strategies to navigate such resistance include: 

●  Framing DEI as a Human Capital Issue 

Specifically, maximizing human capital can boost profitability and productivity by leveraging employees’ skills, knowledge, and experience. Leaders can emphasize how DEI initiatives enhance talent attraction, retention, and engagement, broadening and deepening the pool of skills, knowledge, and experience available to the organization. More specifically, a company can embed innovation into its human capital policy by strategically hiring diverse talent, such as tapping international talent pools. DEI hiring practices enable companies to capture the talent that is in full supply today instead of facing even stiffer competition as companies re-embrace diversity in hiring in the future.

●  Leveraging Real-World Rebuttals to PESTS 

To counter pressure from the public, government, or other entities, leaders can point to the many high-profile examples in which PESTS rationales were refuted by reality. For instance, the appointment of Ketanji Brown Jackson to the U.S. Supreme Court raised the ire of some opponents who claimed the supply-side argument after President Joe Biden’s commitment to nominate a Black woman to the Court. Yet, Biden’s pledge enabled what is considered one of the Court’s most qualified nominations in history. This opportunity may have otherwise been inhibited by barriers rooted in racism.

●  Measuring and Communicating Success in Varied Ways 

While data is the language of the C-suite, the quantitative story of DEI’s long-term impact isn’t always readily available. Business leaders championing diversity initiatives can first leverage storytelling and other subjective measures to make the business case and reinforce the value as objective outcomes become more apparent.

Charting a Path Forward for DEI

Corporate DEI strategy is not a static, siloed concept. Perceptions and trends among stakeholders, government entities, and the public directly influence it, and perceptions and trends evolve. Business leaders who remain cognizant of how and why the tides are changing within those spheres can help their organizations design programs to withstand pressure. Doing this successfully requires a deep understanding of the most common arguments made against DEI initiatives: the PESTS. A deeply embedded DEI strategy in a company’s culture and value systems will assist the organization in staying on the leading edge of innovation.

Dr. Akolisa Ufodike is a distinguished academic with expertise in public administration, ethics, and governance. He is an associate professor at York University and a member of the C.D. Howe Institute’s Human Capital Policy Council. He has published extensively on topics such as accountability, diversity, equity, and inclusion (DEI), and public sector finance.