Securities Litigation Risk In The Evolving DEI Landscape

President Trump has issued a series of executive orders targeting the private sector's initiatives related to Diversity, Equity, and Inclusion (DEI) and/or Diversity, Equity, Inclusion, and Accessibility (DEIA).¹ These and other recent executive actions and developments concerning DEI come on the heels of the Fifth Circuit's December 2024 decision striking down the Nasdaq's board diversity rule that would have required companies to have, or explain why they do not have, at least one female director and one director who self-identifies as an underrepresented minority or LGBTQ+.²

The U.S. disclosure regime does not require companies to disclose DEI-related programs or policies, per se. But in recent years, many companies disclosed DEI-related information as part of business, risk factors, human capital management, board and executive compensation, or other sections of their periodic SEC filings, proxy statements, and public disclosures. Even before the recent change in