Deere Looks to Nix DEI-Related Shareholder Proposals

This past summer, Deere & Co., the manufacturer of John Deere lawnmowers, became a poster child for the backlash against corporate DEI programs, ditching its efforts in the face of a public pressure campaign. The company is now trying to avoid proposals aimed at forcing it to explain those decisions.

To recap: We told you in July about the campaign orchestrated by conservative influencer Robby Starbuck to target companies like Deere and retail chain Tractor Supply Co. for DEI-flavored initiatives such as LGBTQ+ pride festivals and voter-registration drives. According to Starbuck, the effort resulted in seven companies dismantling their DEI programs, including Deere.

As You Sow, a nonprofit shareholder advocacy group, wants to know more about what prompted Deere to abandon its DEI initiatives. In September, As You Sow submitted a shareholder proposal on behalf of Amalgamated Bank requesting information about what it described as an “ambiguous and inconsistent shift in policies and practices regarding its workplace diversity strategy.” In addition to noting Deere’s prior endorsements of the benefits of its DEI program, the organization specifically pointed to a lack of data on matters such as hiring and retention. Without such information, investors can’t adequately gauge the impact of the program on Deere’s performance, according to As You Sow.

“Without data on the outcomes of its workplace equity efforts, investors will lack confidence in Deere’s ability to build, use, and maintain an effective and meritocratic workforce,” the proposal said. As You Sow proposed that Deere issue a publicly available report to “provide transparency on outcomes using quantitative metrics for workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity.”

Deere responded to the proposal by sending a no-action letter to the Securities and Exchange Commission – which would effectively allow the company to disregard the proposal. Among its objections, Deere said the proposal duplicated another the company received.

Deere though, is hearing it from both sides, as it simultaneously deals with a proposal from Bowyer Research on behalf of a conservative activist organization, the American Family Association, seeking information on the company’s support for left-leaning nonprofits. These include organizations such as the Southern Poverty Law Center and Human Rights Campaign. While acknowledging Deere’s efforts to scale back its DEI initiatives, the proposal asks Deere to go one or several steps further by providing “an analysis of how John Deere’s contributions impact its risks related to discrimination against individuals based on their speech or religious exercise.” Deere has requested a reprieve from the SEC on the grounds that the proposal is “impermissibly vague” and is not “economically significant” while dealing with matters tied to Deere’s ordinary business operations.

So, Deere finds itself backed into a corner on DEI, as proponents with vastly different perspectives use the same company action to make opposing arguments. And it appears Deere’s only recourse is to appeal to the SEC to throw it one or more lifelines. Will it happen? Will the Commission bail Deere out on one side but not the other? And if so, on which? It’s a fascinating situation that we will continue to watch closely.