DEI-lemma?

It’s been over a year since the Supreme Court ended affirmative action in higher education. Since then, the ruling has opened the door to bold attacks on DEI from campuses to boardrooms to state capitals and even the campaign trail.

This movement against DEI is gaining momentum, particularly in corporate America. In the last few months, there have been public pressure campaigns and lawsuits targeting organizations' DEI programs and policies. In some areas, we are seeing a rollback of DEI language and commitments, with recent developments at Microsoft, Tractor Supply and SHRM making headlines.

Despite this pressure, many companies aren’t backing down from their commitments, with 72% of C-suite and HR leaders stating that they will continue supporting DEI. 

Against this fraught and polarizing landscape, our DEI experts urge leaders to prepare for potential reputational threats by sticking with enduring communications principles:

• Get your house in order: Evaluate existing policies, practices and programs from a risk-management and legal perspective.

• Plan ahead: Adopt a decision-making process for communicating or acting on controversial topics and scenario-plan ahead of an acute need.

• Stick to your values: Ground commitments in business strategy and ensure alignment with previously stated values and principles.

To learn more about our DEI communications approach, please contact USDEITeam@FGSGlobal.com.

The third plenary session of the 20th Chinese Communist Party Central Committee recently concluded against the backdrop of sluggish economic recovery, historically low foreign direct investment and tensions with the US and EU. Consequently, the plenum focused on moving China’s policies toward state-owned, private and foreign investment, with economic security as the bottom line.

As a result, multinational corporations (MNCs) are now facing heightened challenges in China due to rising geopolitical tensions and Beijing’s increased focus on national security. With the potential for increased scrutiny of their Chinese operations, MNCs need to engage more proactively with Chinese stakeholders.

MNCs should also pay close attention to the implications of these latest economic policy measures and government plans. Key considerations include:

• Improved economic governance: The government’s focus on refining economic governance and removing market entry restrictions is a positive shift, signaling a more consistent regulatory environment.

• Market openness and innovation: China’s commitment to opening its domestic market to multinational financial institutions and promoting technological upgrades presents new opportunities but also increased competition from domestic players.

• Customized strategies: A one-size-fits-all approach is inadequate. MNCs need tailored, sophisticated stakeholder engagement and public affairs strategies to navigate the complex environment.

As geopolitical tensions escalate and U.S. elections approach, MNCs need to be mindful of potential backlash in their domestic markets targeted at their China business operations. MNCs must carefully manage stakeholder trust and present a clear, coherent strategy for sustainable growth in China.

For more, subscribe to FGS Global’s Asia In Context newsletter.

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The latest spat between the European Commission and Meta underscores the evolving regulatory landscape and the broader trend of heightened global scrutiny of large technology companies.

The European Commission has accused Meta of breaching the EU’s Digital Markets Act (DMA), which aims to regulate some of the largest digital companies’ power. 

The EU’s new digital rulebook requires users consent to their data collection. To comply, Meta began offering European users the option to pay for ad-free versions of Instagram and Facebook platforms rather than have their data collected in tailored advertising.

EU regulators are now arguing this move violates DMA privacy rules by forcing users to pay to avoid having their data collected, rather than offering a free ad-based model that doesn’t rely on user data collection. 

If the investigation finds Meta in violation of the DMA and the company fails to adjust its practices, it could face significant fines, potentially up to 10% of its annual global revenue. Meta’s compliance strategy will be critical in determining whether it can navigate these regulatory hurdles without significant financial repercussions.

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