Throughout his successful campaign, President Trump repeatedly pledged to take on the oppressive “woke” regime of DEI that has infiltrated seemingly every aspect of American life over the past decade.
Perhaps none of Trump’s appointees have been more vocal in their opposition to the race and sex-obsessed worldview of DEI than Secretary of Defense Pete Hegseth.
“We've said goodbye to the harmful effects of woke culture and so-called diversity, equity and inclusion programs,” Hegseth told an audience at the Army War College. “We're removing DEI content, eliminating quotas, ensuring recruitment, retention and promotions are based on performance, not immutable characteristics. DEI is dead at DOD. We're building a merit-based culture that promotes and rewards individual initiative, excellence and hard work.”
As Secretary Hegseth roots out the discriminatory DEI policies at the Pentagon and throughout the Department of Defense, he will no doubt turn his eye to high-dollar federal contractors like the Southern Company. And that has shareholders concerned.
Southern, worth $100 billion, is better known to most Americans under its subsidiaries like Alabama Power, Georgia Power, Mississippi Power, Southern Power, and Southern Company Gas. Employing over 28,000 across 34 states, the company earned the top spot among electric and gas utilities on Fortune Magazine’s “World’s Most Admired Companies” earlier this year.
But as with many corporations over the past several years, Southern has traded on its good name (and its investors’ trust) to advance the very divisive and discriminatory DEI policies now in the crosshairs of Secretary Hegseth and the administration as a whole.
Perhaps most notably, in 2020, Southern committed $225 million over five years to what it deemed “social justice and racial justice.” While details of where, exactly, this money was spent are sparse, Southern’s now-archived “2023 Moving to Equity Report” boasts that over $201 million of that commitment had already gone out the door by the end of 2022.
Meanwhile, Southern also launched a DEI reporting site, “Boldly Forward,” to track its commitments to policies that prioritize hiring, promotion, and contracting based on factors like skin color and sex. Like the “Moving to Equity Report,” that page is only available via Internet Archive, along with companion reports where the company crows about its success hiring and promoting “People of Color” and its board’s commitment to open discrimination under its version of the NFL’s “Rooney Rule,” which requires teams to interview at least one non-white head coaching candidate during the hiring process.
Southern doesn’t have the household brand recognition of other corporations like Target, Walmart, or IBM, which have become emblematic of the danger that embracing DEI poses to a company’s fortunes. However, its status as a preferred contractor with the Department of Defense, combined with its all-in approach to wokeness, could cause Secretary Hegseth to make Southern a poster child for public correction. That would be disastrous for Southern’s shareholders.
It's no wonder, then, that shortly after last November’s election, Chris Womack, Southern’s Chairman, President and CEO, wrote President Trump a conciliatory letter expressing his hope that Trump would “consider Southern Company, our subsidiaries, and our 28,000 employees as a partner and resource for you and your administration” and offered to “help you in any way.”
But the letter doesn’t even mention DEI, much less commit to dismantling it. And even after all the website scrubbing, Southern still retains many of its same problematic commitments. For example, its Human Capital Pillars resource says “our strategy for recruiting, retaining, and developing employees includes a deliberate focus on DE&I” and its Company Culture Memo states that “Southern Company commits to promote an actively anti-racist culture.” Likewise, Southern’s “Diversity Programs” page still touts its commitment to preferencing suppliers based on sex and race—a practice Trump’s General Services Administration has also set out to abolish.
At this week’s annual meeting, stockholders had the opportunity to consider a proposal authored by Alliance Defending Freedom and led by Inspire Investing that called on Southern’s leadership to provide a report on how these policies have affected their shares, as well as how the company plans to navigate the current legal and contractual landscape. Southern’s attempts to keep its DEI practices alive are generating serious legal, reputational, and financial risk.
Company leaders don’t report to activists, but to shareholders. Especially with so much at stake in federal contracts, Southern’s shareholders are now urging Womack and the company’s board to take serious steps to weigh the company’s commitment to DEI against its long-term fiduciary duty to its investors. That’s not too much to ask.
Jeremy Tedesco (@Jeremy_Tedesco) is senior counsel, senior vice president of corporate engagement at Alliance Defending Freedom (@ADFLegal).
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