Following the prominent events of early 2020, as part of what’s often referred to as a national, racial reckoning, countless institutions altered their policies. Large publicly traded corporations (including Coca-Cola Company, Novartis AG, McDonald’s Corporation, Starbucks Coffee Company, Lowe’s Companies, Inc., NASDAQ, Inc., and much of the financial services industry) rolled out new policies — under banners invoking diversity, equity, and inclusion — concerning matters ranging from their selection of vendors, to hiring and promotions, to election of future directors to (in NASDAQ’s case) willingness to list customers at all. Those policies have raised concern among some over their potential violation of civil rights law (both state and federal), including Dan Morenoff, the Executive Director of the American Civil Rights Project. Do officers and directors of publicly traded companies advancing these policies run afoul of existing corporate law, with possible personal liability for breaches of fiduciary duty and for their use of corporate resources pursuing ultra vires actions?

Citing the related concerns of shareholders, the ACR Project demanded the public retraction of such policies by Coke last year — Coke acceded in all but name in March, declaring that the policies at issue “have not been and are not policy of the company[.]” The ACR Project has since made demands on behalf of shareholders to the officers and directo

rs of Lowe’s, Novartis, McDonald’s, and Starbucks. America First Legal appears to have taken a related tack this week in publicly demanding on behalf of shareholders that the Walt Disney Company’s officers and directors launch investigations into alleged violations of employee’s civil rights.


— Dan Morenoff, Executive Director, American Civil Rights Project

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