In recent months—particularly following the United States Presidential inauguration on January 21, 2024, and the subsequent flurry of executive orders—some prominent corporations (e.g., Meta, McDonalds, Walmart, Ford) have signaled a rollback of their diversity, equity, and inclusion (DEI) commitments, going so far as to terminate existing DEI programs. By contrast, Costco and other companies have reaffirmed theirs — 87% of organizations surveyed report they plan to continue or expand DEI initiatives in 2025, underscoring that inclusive practices remain good for business.​

Amid the turbulence and increasingly politicized discourse around DEI, the business and popular press have largely focused on reporting controversies rather than highlighting the deeply substantiated operational and financial benefits that arise when organizations ground their decisions in inclusive practices.

A 2024 Deloitte report shed light on the negative business impacts of “covering” — defined as downplaying one or more identity elements in order to blend in. Notably, Deloitte found:

• Although 61% of surveyed workers believe their team leaders genuinely want them to be authentic, 67% of surveyed C-suite executives and senior managers themselves engage in covering. In other words, “leaders often cover more, not less, than those lower in the organizational hierarchy,” setting a precedent for employees to do the same.
• More than half of all surveyed workers (54%) — across all identities — say that the need to cover at work has negatively affected their ability to perform at their best.
• 56% report that the need to cover at work has negatively impacted their commitment to the organization.

In other words, while language and positioning matter, intentional and authentic leadership matters far more. If over half of employees and two-thirds of managers and executives are bringing less than their full selves to work, it creates a substantial drag on performance. In an increasingly fraught business environment, getting the (admittedly unfortunately named) “war for talent” right is only growing more critical for any enterprise — and is all the more so for impact-oriented organizations, regardless of size or sector.

While performance drag can be considered a “stick,” there is also a “carrot” in the form of performance advantages. Research from MIT Sloan Management Review, McKinsey, The World Economic Forum, Harvard Business Review, and many others has repeatedly highlighted the financial, innovation, and operational benefits directly attributable to effective inclusion practices at all organizational levels. Pensions Age reported widespread industry recognition of the importance of inclusive and diverse boards, with 78% of respondents saying they felt diversity was important, and over 80% agreeing that inclusive boards lead to better decision-making, governance, and member outcomes.

Georges Dyer, Executive Director of the Intentional Endowments Network, notes that many funders see inclusion as critical to achieving innovative outcomes:

“Impact entrepreneurship thrives on inclusivity. Investing in diverse founders and communities drives economic returns by unlocking untapped potential, fostering innovation, and creating solutions that truly serve society. Inclusive leadership isn’t just a moral imperative; it’s a strategic advantage in building a stronger economy for everyone.”

Kristi Petrie, Co-Executive Director of the AJL Foundation, concurs:

“Inclusivity has been the key driver of our organization’s evolution and resulting successes. From governance to strategic planning to programming, bringing together and aligning diverse collectives enables us to work toward our mission and serve our communities much more effectively.”

So, what can impact leaders do? In a word: authenticity. Consider the following:

1. Lead by example—be open about your own identities.
2. Encourage and support employees to bring their whole, authentic selves to work.
3. Affirm and celebrate the identities of employees, customers, vendors, and suppliers alike.
4. Reexamine and clarify your organization’s mission, vision, values, and strategic priorities in light of the evolving context.
5. Deepen connections with employees, customers, and suppliers—ask about their experiences with your company or product, listen, and adapt where feasible to unlock new opportunities.
6. Consider your employee compensation packages, including holiday policies and 401(k) plans, ensuring they reflect your organization’s values and honor employees’ identities and aspirations.
7. Don’t go it alone—collaborate with peers and allies to learn and improve together.

Impact leaders have the power and potential to shape better organizations and economies. As the World Economic Forum notes, “anchoring diversity and inclusion in the business world and global economy is becoming increasingly critical for reviving growth, accelerating innovation, reducing inequalities, and bolstering resilience.” The evidence is clear: inclusive, authentic leadership is both a moral imperative and a strategic necessity for any organization striving for meaningful impact.