EXCLUSIVE: Two dozen state financial officers sent a letter today to the U.S. Securities and Exchange Commission (SEC), asset managers, proxy advisors and public companies, sounding the alarm on the financial risk of prioritizing a political agenda, like DEI, over financial returns.
In the letter, 24 state financial officers outline the risk of DEI destroying shareholder value and warn of potential consumer backlash and boycotts, decreased productivity and increased litigation costs when a political agenda invades financial institutions.
“Asset managers and proxy advisors should not prioritize a political agenda over financial returns by supporting pro-DEI shareholder proposals and/or voting against directors who do not support such proposals,” the letter said.
The officers highlight the steps taken by the SEC under President Donald Trump’s administration to prevent activists from pushing a political agenda in corporate boardrooms. The letter advises companies on how to push back through SEC no-action letters and by pursuing a court ruling to block activist proposals.
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“The SEC’s recent guidance directing asset managers that push DEI and other ESG policies on companies to file on the more rigorous Schedule 13D is a positive first step, but enforcement must follow. Influencing corporate DEI policies is inconsistent with the role of a passive investor and should trigger Schedule 13D filing requirements,” the letter said.
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Schedule 13D is an SEC filing requirement when someone acquires a significant stake in a public company. The officers argue in the letter that Schedule 13D filings should be required for asset managers who influence corporate DEI policies.
“As state financial officials, we have a duty to protect taxpayer funds and the retirement savings of state employees. Asset managers and proxy advisors should oppose proposals that compel companies to maintain or reinstate unlawful DEI practices that erode shareholder value,” the state financial officers said in the letter.
The financial officers demand asset managers and proxy advisors who manage money for investors and help them decide how to vote in shareholder meetings oppose “unlawful DEI practices” and prioritize shareholder value and financial returns.
“Asset managers and proxy advisors who continue to prioritize political agendas, such as DEI, over financial performance are neglecting their fiduciary responsibilities. As state financial officers, we have a duty to act in the best financial interests of pension and retirement beneficiaries. We urge organizations to stop focusing on DEI metrics and recommit to policies that enhance shareholder value,” Utah State Treasurer Marlo Oaks, one of the 24 state financial officers to pen the letter, said in a statement to Fox News Digital.
“President Trump has made it clear that incorporating DEI into company policies should be stopped, but activist investors, asset managers and proxy advisors continue to prioritize a political agenda over financial returns. By using their influence over corporate boards, organizations such as BlackRock, Glass Lewis and ISS are able to inject woke policies such a DEI into companies, which erode shareholder value,” OJ Oleka, CEO of the State Financial Officers Foundation (SFOF), told Fox News Digital.
Despite Trump rejecting corporate DEI policies, Oleka said activists continue to “prioritize a political agenda over financial returns” which can “erode shareholder value.”
Oleka and 24 state financial officers from across the country are advocating for “the commonsense policy of measuring shareholder returns as the primary metric for success.”
“Under the Trump Administration, we have seen the SEC take steps to combat radical ideology in corporations by releasing new guidance that holds these activists accountable for wrongfully trying to influence companies and corporate boards into prioritizing a far-left political agenda, rather than focusing on fiduciary duty and maximizing profits. In every area of the American financial sector, our state financial officers will continue to fight for the commonsense policy of measuring shareholder returns as the primary metric for success,” Oleka told Fox News Digital.
Signatories of the letter include state financial officers from Alabama, Alaska, Arizona, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Wyoming.
The companies, asset managers and proxy advisors receiving the letter include the SEC, BlackRock, Capital Group, Fidelity, Franklin Resources, State Street, T. Rowe Price, Vanguard, Glass Lewis, ISS, Accenture, Amazon, Boeing, Brown-Forman, Caterpillar, Deere & Co., Ford, Harley-Davidson, Lowe’s, McDonald’s, Meta, Molson Coors Beverage Co., Nissan, PepsiCo, Stanley Black & Decker, Target, Toyota, Tractor Supply and Walmart.
An SEC spokesperson declined Fox News Digital’s request for comment.
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