Costco Wholesale’s actions regarding an upcoming annual shareholder meeting slated for late January 2025 are making headlines. Of particular note is a suggested agenda item for a proposal requesting a vote to report to outline the risks around Costco’s diversity, equity, and inclusion (DEI) policies. Specifically, the group submitting the proposal expressed concern over financial, legal, and reputational damage to Costco if the organization stays committed to DEI. The proposals call out warnings around discriminatory lawsuits like that of Starbucks, retaining a chief diversity officer position, and citing concern over Costco’s unwavering commitment to equity. However, Costco’s Board of Directorsreviewed the proposal and unanimously recommended against it, citing inefficient content and evidence for rigor in structures to ensure fairness to justify investment in investigating the effectiveness of DEI at Costco. The Board response also highlighted doing the right thing for its communities and highlighted concern over ulterior motives in the proposal submission. Essentially, the Board voted to favor inclusive leadership and encouraged stakeholders to vote for inclusion. Costco’s move to not cave into competitive pressures and stay the course with DEI commitments earns the title of Inclusion Hero of the Week.
Inclusive Leadership Is About Walking The Talk:
A guiding principle around inclusion is ensuring that leaders walk the talk, which essentially means ensuring alignment between leader language, behaviors, and actions; otherwise, it can appear disingenuous. Costco has done so and shown commitment to inclusion in the workplace in several ways.
- There is clear leadership buy-in for DEI as a priority. Costco’s site messaging includes a quote directly from the CEO about the value of appreciation for inclusion: “We flourish from having employees with different views, experiences, and ideas.” Additionally, the Board’s actions align with the goal of an inclusive workplace. For example, there are dedicated resources to foster an appreciation for differences across the enterprise.
- The Costco mission states that the organization is vested in “doing the right thing—for our members, our employees, our suppliers, our communities, and the environment.” The decision to stay the course aligns with the Company’s mission, which is also expressed in the voter proxy ready information to support decision-making.
Increased Representation Is Important For Inclusive Leadership:
Much discussion has been about the importance and necessity of representation in leadership to allow for the thriving of inclusive workplaces. While Costco is to be applauded for its decision to stay with DEI, FY24 demographics show opportunities for increased representation. The organization shows 54.2% of employees are male and 45.6% female. Management numbers show 62.9% male and 37.1% female. For executives in the United States, the numbers show that 72.3% are male and 27.7 % are female. For Race and Ethnicity non-management roles, 33.1% are Hispanic, 9.3% Black, and 8.5% Asian. Costco has 36% gender diversity and 9% race/ethnic diversity on its Board. Costco reporting shows more demographic breakdowns.
Inclusive Leaders take note. Organizations don’t have to be perfect to make impactful strides in creating inclusion in the workplace. Costco continues to march forward unbothered by competitor actions, such as Walmart (owner of Sam’s Club), which chose to move in the opposite direction, scaling back on DEI commitments. The example above shows Costco staying the course to appreciate employees, vendors, and customers.