Governance bodies from across Europe have affirmed their commitment to “diverse leadership” and “inclusivity” in companies amid continuing pressure in the US to curtail policies designed to improve diversity and inclusion.

The chairs of eight governance watchdogs—including the UK’s Financial Reporting Council and seven from within the EU—today issued a statement after meeting to discuss governance and its position in a global business landscape affected by geopolitical instability and economic uncertainty.

The statement says: “In challenging times the chairs stress that long-term success includes diverse leadership, integrity, inclusivity and stakeholder engagement.”

They add: “As chairs we collectively recognise that sound governance is a prerequisite for sustainable growth, effective leadership and investor trust.

“In these volatile times, corporate governance codes provide much-needed continuity and direction, offering a stabilising compass that helps companies navigate complexity with clarity of purpose.

“They also give companies the flexibility to adapt, innovate and compete globally.”

The statement comes at a time when business leaders are closely watching developments in the US where DEI has been under pressure.

Action against DEI, or EDI as it is more commonly known in the UK, was swift following the arrival of Donald Trump for his second term at the White House.

The Trump effect

Soon after taking office Trump issued an executive order, 14151 , outlawing DEI programmes at federal agencies. Companies working for the government quickly followed up by removing their own programmes. Rolls-Royce recently became one of the latest.

There have also been reports that US embassies have been writing to overseas suppliers seeking assurance that DEI policies were not connected to the provision of their services.

In April, a survey by the Institute of Directors (IoD) said 71% of corporate leaders had no plans to change their approach to diversity, equity 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 governance US companies will little to no bearing on investment in their own ED&I programmes.”

The UK government is committed to standing by DEI rights through the Employment Rights Bill, currently under review in the House of Lords.

However, employment lawyer Hannah Ford from law firm Stevens & Bolton recently told the Financial Times that UK businesses with a US parent, or with US expansion plans, could face pressure to conform.

Meanwhile, the Guardian reports companies are “rebranding” diversity programmes to avoid unwanted attention. Words currently in use include “wellbeing”, “belonging”, and “culture”.

The regulators also said “governance should not burden companies, but rather empower them to act with purpose, resilience and strategic clarity.

They are particularly concerned with the corporate reporting landscape. The European Commission is currently engaged in a project to trim non-financial reporting obligations following on competitiveness from former European Central Bank president Mario Draghi.

“Reporting should enhance transparency, but never replace a company’s responsibility,” the governance chiefs warn. “Our corporate governance codes are designed to support, not curb, entrepreneurial freedom.

“That balance is crucial if Europe is to strengthen its competitiveness and seize the opportunities of this transformative era with new challenges as cybersecurity and artificial intelligence.”