President Trump's executive orders on DEI have set a cultural precedent that many worry could ripple through organisations globally, including in Australia.
Trump’s rapid rollback of DEI initiatives, the removal of work-from-home flexibility, renaming landmarks with a White-America-centric focus, halting the push for clean energy, and purging employees who oppose his agenda are just some of the controversial steps taken under his “me-first agenda”.
Speaking to InvestorDaily, associate professor Nathan Eva from the department of management at Monash Business School warned that these actions could influence Australian leaders and businesses to adopt similar measures.
“This is going to have huge impacts for how we do business worldwide, because, whether we like it or not, as Australia we do look up to the US as the large English-speaking economy that we do business with on a daily basis,” Eva said on a recent episode of the Relative Return Unplugged podcast.
“Our business practices are informed by them … The DEI initiative, the clean energy initiatives, with layoffs, there is a chance that that is going to happen here in Australia.”
Trump signed an executive order dismantling the DEI program across the federal government on his first day in office, and already by Wednesday he had ordered the dismissal of all federal DEI staff and called on the private sector to abandon what he described as the "illegal and harmful discrimination" inherent in DEI initiatives.
The executive order reads: “The Biden administration forced illegal and immoral discrimination programs, going by the name 'diversity, equity, and inclusion' (DEI), into virtually all aspects of the federal government, in areas ranging from airline safety to the military.
“That ends today. Americans deserve a government committed to serving every person with equal dignity and respect, and to expending precious taxpayer resources only on making America great.”
For Eva, the Trump 2.0 era is reminiscent of the hyper-masculine workplace cultures of the 1980s and 1990s, where fitting in often meant conforming to "ladsy" behaviour and being "one of the boys".
One of the most startling examples of this came from Enron, the infamous Houston-based energy-trading and utility giant, where top executives underwent laser eye surgery, which prompted employees to follow suit in a bizarre display of conformity.
“That is what you did, you had to go out on the weekend and motorcross ride, because that’s what everyone did … I worry that a lot of leaders are going to try and follow suit, which is going to be detrimental to them, their employees and their company,” the associated professor said.
Eva warns that Australia’s progress toward a fairer, more equitable society could unravel if copycat leaders do in fact follow suit.
“We know that this overly hyper-masculine, this really dominant leadership is not sustainable long-term, it does not have long-term financial benefits to organisations. And so, for organisational leaders who are looking at this, saying 'do I need to shift my leadership style to this more dominant one', absolutely not,” he said.
“Trump doesn’t need to worry about long-term performance, he has four years, four years left to be President and to be able to enact his particular agenda.”
Eva also cautioned that with many fund managers operating in Australia but headquartered in the US, the impact of Trump’s agenda will inevitably be felt locally in one way or another.
“Anything that is happening in US headquarters is going to have a trickle down effect in Australia, whether that is going to be a direct effect into our hires or whether it’s going to be the emotional labour that our employees are now exerting to look after our American friends and colleagues, that’s going to have a big impact as well,” he said.
According to The Australian Financial Review, Australia is already feeling the ripple effects of Trump’s DEI agenda, with the ASX’s governance council refusing to put a timeline on finalising the new rules that would require company directors to disclose their sexuality and other personal characteristics.
Responding to the AFR’s report, Eva said the data derived via the new rules is critical for understanding the composition of successful businesses, identifying trends, evaluating progress, and determining which initiatives are effective and which are falling short.
“Without the hard data to demonstrate ‘yes, this is working, this is not’, we’re doing surveys, we’re interviewing, but really we’re having guesses based on small samples,” he said.
Based on the data that is currently available, Eva acknowledged that DEI initiatives in Australia are broadly successful, but still have significant progress to make.
“We are not where we need to be yet, but we are getting there. The initiatives that are there are working,” he said.
“The next generation of leadership that we have coming through looks so much more diverse than the generation we have at the moment, and we need to continue to support them to make that leap.”
Overall, Eva believes the current climate is “a scary time to be working in organisations”, extending his concerns to start-ups and other sectors outside traditional corporate structures.
“We don’t fully understand the ramifications of these executive orders just yet, they are going to come out as we continue on,” he said.
Eva agreed that one thing is clear - the only group unlikely to have their merits questioned under the DEI rollback are white males.
To hear more from Eva, click here.
