GILEAD SCIENCES, INC. | Report on risks of the company's DEI practices for contractors at GILEAD SCIENCES, INC.

Status
0.99% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
GILD
Lead filer
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
Shareholders request the Board of Directors of Gilead Sciences Inc. conduct an evaluation and issue a report within the next year, at reasonable cost and excluding confidential information, assessing how the Company’s DEI requirements for contractors impacts Gilead Sciences’ risks related to discrimination against individuals based on their race, color, religion (including religious views), sex, national origin, or political views.
Supporting statement
Gilead Sciences is one of the largest companies in the United States, doing business with thousands of vendors, suppliers, and other strategic partners. Gilead should respect the diverse views of its business partners. But instead, it requires them to participate in Diversity, Equity, and Inclusion (DEI) practices as a condition of receiving contracts or doing business.



The 2024 Viewpoint Diversity Score Business Index1 found that 58% of the largest tech and finance companies, as well as companies like Gilead Sciences, have public policies requiring their vendors and other business partners to implement divisive practices. These include requiring vendors/suppliers to implement DEI training or workforce management policies or practices, diversity benchmarks for boards or workforces, disclosure of DEI metrics, promoting DEI through programs and initiatives, or similar requirements for their own supply chain.



This is especially concerning given Gilead Sciences’ commitments to advancing shareholder activist goals via its supplier policy. As a company with a perfect 100 score2 from the Human Rights Campaign, Gilead has committed3 itself to a “[s]upplier diversity program with demonstrated effort to include certified LGBTQ+ suppliers.” This language raises serious concern that Gilead is imposing policies regarding vendor/supplier selection that discriminate against suppliers to meet certain activist goals regarding LGBTQ+ supplier numbers.



These policies raise serious legal risk. The Eleventh Circuit recently held that a company that offered grants only to minority entrepreneurs violated the Civil Rights Act’s prohibition against race-based contracts in American Alliance for Equal Rights v. Fearless Fund. Requiring vendors and other business partners to implement DEI metrics similarly discriminates based on race.



This is on top of the fact that DEI workforce initiatives are facing sustained legal pressure in light of recent Supreme Court decisions in Students for Fair Admissions v. Harvard, Groff v DeJoy, and City of St. Louis v. Muldrow.



These factors have made DEI increasingly unpopular. The Wall Street Journal recently reported that “Diversity Goals Are Disappearing from Companies’ Annual Reports.”3 Some companies are even revoking their DEI commitments.4



This is part of a larger backlash against the politicization of corporate culture. A recent Gallup poll found that only 38% of Americans want businesses to take stances on current events; this was part of a steady, multi-year decline among Americans across nearly every age, race, sex, and political persuasion.5

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