Rolls-Royce, the FTSE 100 defence and aerospace giant, is scaling back diversity and inclusion policies and programmes in its North American operations, in compliance with new US law.

The news follows Executive Order 14151, issued by the White House in January, which outlawed DEI programmes in federal government, revoking Executive Order 13895. Companies with federal contracts have followed the order.

A Rolls-Royce spokesperson said: “We support all our colleagues to be at their best, ensuring we live by our behaviours and drive a culture of high performance and engagement.

“We regularly review our policies and approach to sure we achieve this outcome while complying with all requirements in the jurisdictions in which we operate.”

Reports suggest mentions of DEI have been removed from Rolls-Royce websites.

Rolls-Royce employs around 43,000 people worldwide, with 6,000 in the US.

‘Supportive workplace’

Shareholder advisers Minerva blogged this week: “The move marks a reversal for Rolls-Royce which has previously championed its DEI efforts. The company was notably recognised as a supportive workplace for LGBTQ+ employees, earning a spot on the UK’s Stonewall Top 100 Employers’ list and receiving a ‘Gold’ rating for LGBTQ+ inclusion in 2022.”

At the end of last year, a survey from The Conference Board, a US governance think tank, found that DEI was under pressure in the US, but that less than 10% of firms planned to reduce “DEI resources” that “reflected a continued recognition of diversity’s business value in driving innovation, market adaptability and competitiveness”.

In the UK, companies have been advised to stand by their inclusion policies. In January, Roger Barker, head of governance at the Institute of Directors (IoD), said: “Keep calm and carry on. A constructive approach to inclusion and diversity makes sense from a business perspective, despite the political headwinds.”

‘Political fashion’

He added: “For most companies, the trend towards inclusion and diversity in business practices is a permanent shift in mindset and behaviour. It is less susceptible to fluctuations in political fashion compared to the US.”

Last month, a survey from the IoD showed a majority of UK companies have ignored the anti-DEI direction of Donald Trump, with 71% of corporate leaders saying they had no plans to alter their approach to equity, diversity and inclusion.

Alex Hall-Chen, principal employment policy adviser at the IoD, said: “Particularly for employers with no US presence, the prevailing view among British businesses is that decisions made by the US government and US companies will have little to no bearing on investment in their own ED&I programmes.”

Writing for Board Agenda, DEI expert Doyin Atewologun argues: “Board members as individuals and as a collective must resist making hasty, reactionary decisions in the current wave of ‘anti wokeness’.

“The work required to build fair, inclusive businesses where all talent thrives to retain competitive advantage is too important and too complex for superficial responses.”