Jennifer S. Fan


Inclusive corporate leadership is now at the forefront of discussions related to corporate governance. Two corporate theories help to explain the rise in prominence of diversity, equity, and inclusion (“DEI”) efforts in corporate leadership. First, an expanded definition of corporate purpose which elevated the idea of the importance of stakeholders, contributed to the momentum from business and legal quarters for broader corporate inclusion. Second, the increasing publicness of corporations—the social expectation of how large, typically public corporations should act given their position of power—also led to corporations becoming more active in the DEI space. It is against this backdrop that companies began to embrace diversity measures in form and sometimes, substance. Put simply, for companies to attract and retain talent, customers, and investors, their leaders need to lead—or at least be perceived to lead—on corporate inclusivity, especially with respect to the most visible members. However, the implementation of DEI measures within corporate leadership has not been without its challenges. Some have characterized such measures as “woke capital.” Too often, such efforts are limited to press releases, speeches, and reports on diversity statistics. In other words, companies emphasize form over substance.

This Article analyzes how the reconceiving of corporate purpose and societal pressures has impacted corporations’ implementation of DEI measures in the boardroom and throughout the corporation itself. In addition, this Article explores the question of whether a company can ground the fiduciary duties of officers and directors in its duties to society generally. As a complement to environmental, social, and governance and human capital management-related activities of companies, this Article also proposes ways to hold senior executives and boards accountable for diversity-related goals that are touted in public forums. It identifies legal and business mechanisms that could amplify corporate DEI commitments or spur more action.

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