Affirmative Retraction?

By the end of its June term, the U.S. Supreme Court is widely expected to ban or further roll back affirmative action and the ability to consider race in college admissions. 

Its rulings would directly affect public and private institutions of higher education and could overturn 45 years of Court precedent.

The Court’s decisions could also potentially reach broadly into the business world, affecting talent recruitment pipelines and a range of corporate diversity efforts and commitments.

Now is the time to prepare your communications plan.

First, consider these three questions:

• Do we speak? 

• Who do we address?

• What are the right mechanics? 

If you do decide to speak:

• Prepare communications materials now and ensure internal approval processes are in place.

• Reaffirm your values and commitment to diversity — but assess the potential longer-term impact and avoid locking yourself into positions or promises you may regret later.

• Do not contradict prior statements or positions on affirmative action or DEI.

• Consider how you will follow your words with actions — and how your words will be perceived in comparison to your actions.

• Anticipate and account for diverse views and impacts of the decision and its after-effects among your stakeholders.

• Provide a consistent message to all audiences.

In case recent CEO visits to China from companies such as Airbus, L’Oreal, Goldman Sachs, Apple, BMW, Blackstone, Anheuser-Busch, Siemens Energy, Shell and many others haven’t made it clear—having a China strategy is no longer optional for multinational corporations (MNCs). 

Here are some trends we’re watching:

• Western companies are deeply interdependent with China for end markets, supply chains, and global innovation.

• Gaps between headquarters and local management teams are widening, and internal tensions can run high.

• Most MNCs must have a China strategy. Most investors must have a China allocation. Opting out is not an option.

• Chinese companies and investors with Chinese heritage are globally ambitious - yet face unprecedented trust deficits.

• Companies now need China advice all over the world, not just within China’s borders.

• Boards are urgently discussing geopolitical risk related to China, seeking solutions for diversification and de-risking.

If your company needs support with its business strategy in China, you can reach our cross-border team at globalchinabridge@fgsglobal.com.

Affirmative action is not the Supreme Court’s only focus this session. As the end of its term draws closer, here are a few other decisions we’re keeping an eye on:

• In a defeat for unions, the Supreme Court ruled a Washington state concrete company can continue to pursue charges against the International Brotherhood of Teamsters for allegedly coordinating a strike that harmed its product. In the 8-1 decision, Justice Amy Coney Barrett wrote the claims should not have been thrown out by the state due to the National Labor Relations Act, a federal law shielding organized labor. Labor advocates are concerned this ruling may limit the right to strike and expose unions to potential damage claims.

• On Thursday, the Senate approved legislation nullifying Biden’s signature student loan forgiveness program, which is currently on hold pending a Supreme Court decision. The measure garnered support from all Republicans and Sens. Joe Manchin (D-WV), Jon Tester (D-MT) and Kyrsten Sinema (I-AZ). Biden will veto the resolution and neither chamber will be able to muster the two-thirds majority needed to override the veto. Consequently, the fate of the program lies with the Supreme Court, which is expected to render its decision soon.