JetBlue Airways Corp., Molson Coors Beverage Co., and Leidos Holdings, Inc. are part of a growing group of companies listing DEI as a “risk factor” in their securities filings. Fordham Law Professor Atinuke Adediran spoke with Bloomberg Tax about the subject.
It’s notable that DEI is now being included as a risk factor because, if there’s any litigation down the road, companies could point to their securities filing to prove to shareholders that they considered the risk, said Atinuke Adediran, an associate professor at Fordham University School of Law.
While risk factors typically refer to the potential negative impact of a merger or market conditions or something similar, diversity stands out as a less traditional point to highlight. Risk factors can act as a shield against lawsuits from shareholders, but the specific risks are going to vary widely depending on what might be material to a business.
“There’s a reason why they’re putting it there,” Adediran said. “I don’t know that this is going to be standard, but I am almost certain that there will be more of this.”
Read “Firms From KKR to Coors Flag DEI as Business, Legal Risk (1)” in Bloomberg Tax.