U.S. Companies Hit Over CEI Use
It's a start, but not nearly enough.
CEI stands for “Corporate Equality Index”. It acts like a Social Credit System for corporations, forcing them to behave in sometimes self destructive ways. CEI comes out of the global Human Rights Council (“HRC” for short) and can be tied back to Critical Race Theory, in the form of Diversity Equity & Inclusion, along with Gender Theory, and all sorts of other things.
Effectively, CEI is a way to force corporations to behave in ways they might not otherwise.
As you’ll learn in this article, CEI is harmful and destructive. Public outcry is frequently swift and severe, with companies like Anheuser-Busch (parent company of Bud Light), Target, and Tractor Supply having received severe negative public sentiment. Under the public mantra of “go woke, go broke” many companies saw their stock prices plummet after making bizarre moves, like hiring cross-dressing men to represent their brand.
One possible explanation for Chairmen & CEOs of such companies going “woke” can be found in recent reports that appear to indicate windfall bonuses paid to senior leadership at these companies. Even while some companies were laying off employees, closing locations, and suffering lost revenue and dropping stock prices, reports of annual packages above $16 Million have spread across social media. Backlash against this is good, and some companies have backpedaled.
The other shoe has not yet fallen.
Ultimately, these companies are mostly free to do whatever they’d like. They must answer to their shareholders and board; however, due to Proxy Voting (which you can learn about HERE, HERE, and HERE) and resulting left-leaning boards, and left-leaning institutional investors like mutual funds, it’s likely that they’re all on board.
Repercussions are unlikely, however, there is another area of financial markets that’s unlikely to turn a blind eye to such problematic practices. That’s where I’m focused.
ERISA Fiduciaries!
Pensions, union plans, retirement accounts, fiduciaries, endowments, foundations, and Trusts are where to watch.
Those investment managers who allowed investment in such companies - especially those that saw inflated stock valuations - are ultimately where I believe everyone’s focus should be.
In order to illustrate why, I’ll use a hypothetical example:
Imagine that you have $100 Million. You could invest that money however you choose. If someone convinces you that your money will best be invested only in companies with square logos, then shame on you if their scheme doesn’t work out. But now imagine that you’re investing $100 Million on behalf of thousands of workers saving for their retirement. Imagine you’re making choices that impact their ability to retire comfortably. There are entire bodies of law governing your actions - like ERISA and UPMIFA - and at no point would “I invested all the money in companies that have square logos” hold up in court.
What we’re beginning to see are unions and pension review boards suing investment managers for having allowed far-left “woke” stuff like CRT/DEI and ESG into their investment portfolios. For the investment managers it will be incredibly problematic that these things remain largely un-defined, if they find themselves defending their choices in court. All evidence points to virtue-signaling labels, without substance.
I anticipate at least a decade of court cases, starting with the roughly $36 Trillion in U.S. retirement savings.
The court cases will be humiliating, I expect. Smart lawyers, coached by people like me on Fiduciary Due Diligence, Prudent Man Standards, and Stewardship Best Practices, will ask smart questions of the managers, like “define ESG for the court” or “how do you define and measure CRT/DEI?”… I don’t believe much answer will surface, beyond “we gathered a lot of money by virtue-signaling’” or something to that effect.
By the way, this will absolutely include vast numbers of 401(k) Plans and things like them.
The settlements should be massive. The only question will be, who pays them, since the investment managers have largely blanket indemnified themselves… not unlike pharmaceutical companies. But I’ll save that analogy for another, separate long-form post.
- Jonathan Broadbent is the Creator & Founder of UnWoke.Academy, Founder of the Financial PMA, and is Chief UnWoke Capitalist. He is also Founding Partner of Plan Partners, a company that’s been fighting Weaponized Regulators for nearly 4 years. Follow UnWoke.Academy on X/Twitter, Rumble, OBBM Network (Roku, Firestick & AppleTV), Truth Social, Telegram, and YouTube.