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38 ¦ AUGUST 10, 2020 EXPERT OPINIONS

Curb Your Enthusiasm for Diversity
(Or You Could Be Sued)

By Vivia Chen

Corporate America better stop hyping its com- carrot method for decades to get corporations and
mitment to diversity—or it could be staring law firms to address diversity—and we know what
at a lawsuit, warn Wachtell partner David that’s gotten us: bupkis. If there’s one thing that’ll
Katz and consulting lawyer Laura McIntosh. perk up management’s ears, it’s liability.
They write:
The Oracle plaintiff must feel the same way. The
“A recent lawsuit by a shareholder of Oracle suit alleges that Oracle made false statements in its
Corporation has opened a new line of attack on proxy statements and that its directors “deceived
companies that have been slow to diversify their stockholders and the market by repeatedly making
board membership and executive leadership team. false assertions about [Oracle’s] commitment to di-
The complaint alleges that Oracle’s failure to ap- versity.” The complaint asserts that Oracle directors
point racially diverse directors and officers—while “breached their duty of candor and have also violat-
making public statements avowing a commitment ed the federal proxy laws,” noting that the company
to racial diversity—constitutes securities fraud.” lacks African American directors or officers.
Speaking as a journalist who’s been covering di- Sound familiar?
versity issues forever and has seen scant progress, If there’s one thing we all know, it’s that cor-
I’m all for newfangled ways to strong-arm institu- porate America is infinitely hypocritical when it
tions to do the right thing. We’ve been using the comes to race and gender issues. Indeed, is there

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