The reality regarding Donald Trump is a difficult one for many liberal-minded individuals to accept. His presidency has been likened to the unsettling image of a horse running loose in a hospital, as illustrated by comedian John Mulaney. Yet, surprisingly, a portion of what he asserts rings alarmingly true.

For instance, there is a genuine need to reassess trade relations with China and defense agreements within Europe.

Additionally, an executive order (EO) from January boldly states that both government bodies and companies in the U.S. have been employing “dangerous, demeaning and immoral race and sex-based preferences” under the pretense of “diversity, equity, and inclusion” (DEI). Is this merely another impulsive statement from the president, or has he accurately pinpointed a troubling flaw in the pursuit of diversity?

The challenge of balancing merit with diversity—which Trump views as a form of discrimination—has been a recurring concern voiced by senior executives in the UK over the past three years, especially in light of the recent climate following his administration.

Executives are questioning whether focusing on identity over merit is fracturing their workforce. They ponder whether investments in DEI are truly enhancing performance or if they have veered into ideological territory, stifling certain viewpoints and subsequently hindering innovation.

When asked about the “diversity backlash,” many leaders reaffirm their firm’s commitment to DEI. However, this commitment often lacks specificity. It soon becomes clear that numerous CEOs and HR directors desire to uphold the foundational principles of DEI while moving away from the contentious tactics that have surfaced.

During a private roundtable discussion I hosted recently, held under the Chatham House Rule, a senior executive from a leading UK company expressed concerns about the increasing influence of activist staff networks. These groups, they claimed, have gained excessive access to upper management and have started to prioritize personal narratives over professional expertise. Another attendee remarked that these networks have begun to fill a void created by absent leadership.

Privately, executives are acknowledging the necessity to reclaim control of DEI initiatives, directing efforts toward strategies that ensure a worthwhile return on investment. Simultaneously, many black and female employees are voicing concerns that affirmative actions intended to promote opportunity may lead others to question their capabilities and unfairly label them as “diversity hires.”

Executive compensation linked to DEI metrics has long been viewed with skepticism, and this skepticism is now manifesting openly. BT has recently informed investors that it will eliminate targets for management positions based on the representation of women, ethnic minorities, and people with disabilities. Importantly, the firm is not abandoning its commitment to DEI but rather reevaluating the means of achieving it, according to CEO Allison Kirby, who affirmed the company’s dedication to reflecting the diversity of its customer base.

In a similar vein, Barclays has terminated its “representation ambitions” in the U.S. and is deliberating whether to do the same across its global operations.

Moreover, Rolls-Royce has ceased support for specific employee inclusion networks, such as its LGBTQ+ group, Prism, and has introduced a new “employee voice network” designed to be inclusive of all staff members.

The corporate landscape is gradually shifting away from performative actions in DEI, returning instead to its fundamental goals: removing barriers to talent acquisition and leveraging these efforts to meet organizational objectives.

Several commendable initiatives have emerged, including one public utility in the UK that analyzed application processes to identify the unique needs of various candidates, aiming to foster a truly equitable opportunity landscape while serving public commitments and enhancing talent diversity.

Similarly, a pharmaceutical organization has developed diverse programs aimed at supporting the career progression of leaders from various backgrounds, including those of Asian descent and black colleagues, to fortify its leadership pipeline.

This approach is considered positive action rather than affirmative action, which is not permitted in the UK. It emphasizes overcoming barriers faced by individuals in the workplace. Successful firms understand the importance of encouraging all potential applicants and appointing based on merit.

For businesses to derive true value from diversity initiatives, they must avoid treating it as a mere checklist of demographic requirements. Instead, they should articulate clear reasons as to how a more diverse talent pool can provide tangible business benefits.

Conversations among UK businesses are evolving from private dialogues to open discussions aimed at reconnecting DEI with business objectives, pushing back against social justice activism, and ensuring compliance with legal frameworks.

In a paradoxical twist, the seemingly chaotic situation has allowed business leaders the opportunity to reinforce DEI principles instead of undermining them.

Simon Fanshawe is co-founder of the consultancy Diversity By Design and co-host of the podcast Fearless Diversity.