The Values Were Real

They meant it. Every one of them. That was never the question.

Cedric Atkinson

Twenty-five years

Around 2000, Google adopted an informal motto. Three words. "Don't be evil." It was not a slogan for a billboard or a tagline in a commercial. It was written into the company's internal code of conduct, repeated by employees who described it as a genuine operating principle, and cited in hiring conversations as a reason people chose to work there rather than somewhere else.1

Four years later, when Google went public, the founders wrote it into the prospectus. Filed with the Securities and Exchange Commission. Sent to every potential investor in the world. Larry Page and Sergey Brin, in a letter titled "An Owner's Manual" for Google's shareholders:

Don't be evil. We believe strongly that in the long term, we will be better served, as shareholders and in all other ways, by a company that does good things for the world even if we forgo some short term gains. This is an important aspect of our culture and is broadly shared within the company. Google Founders' IPO Letter, 2004

The motto survived a decade of growth. In 2015, Google restructured under a parent company called Alphabet. Alphabet's new code of conduct opened with a different phrase: "Do the right thing." Google's own code still carried "Don't be evil." In April 2018, during the same weeks employees were circulating a petition against a Pentagon AI contract, Google quietly removed the motto from the preface of its code of conduct. It survived only in a final line: "And remember... don't be evil." By then it had been the company's identity for eighteen years. It was printed on conference room walls. Engineers quoted it in internal debates. It was the thing Google employees said when explaining why their company was different.2

In 2018, the motto was tested.

Google was working on Project Maven, a Pentagon contract to develop artificial intelligence for analyzing drone surveillance footage. When employees learned about the contract, nearly four thousand of them signed a petition demanding the company withdraw. About a dozen resigned. The letter to CEO Sundar Pichai was direct: "Google should not be in the business of war."3

Google did not renew the contract. On June 7, 2018, Pichai published a set of AI ethical principles pledging the company would not pursue technologies "likely to cause overall harm." The four thousand employees had cited the values. The company had listened. The values appeared to hold.4

Eight months later, in February 2019, Google declared an internal Code Yellow, the company's designation for a near-emergency. Search advertising revenue was missing its quarterly targets. For seven weeks, engineers from the Search and Chrome teams were pulled from their projects to investigate why user query volume had slowed.5

Ben Gomes, the head of Google Search, had spent more than two decades at the company. He had joined in 1999, a year after the founding, and risen through the engineering ranks to lead the product that was Google's reason for existing. During the Code Yellow, Gomes wrote an internal email. "I think we are getting too involved with ads for the good of the product and company." He wrote that certain strategies for boosting queries, such as degrading the correction of misspelled keywords or choosing not to improve rankings, "should never be taken."6

Gomes was replaced in 2020 by Prabhakar Raghavan, who came from Google's advertising division. An internal email from Jerry Dischler, another ads executive, surfaced during the subsequent antitrust trial: "I didn't want the message to be 'we're doing this thing because the Ads team needs revenue.'"7

In August 2024, a federal judge ruled that Google had maintained an illegal monopoly in general search. The ruling cited the company's own internal communications as evidence. The metric angle is on this site. What matters here is the values angle.8

In February 2025, Google removed the prohibition on AI for weapons and surveillance from its principles website entirely. The section titled "Applications we will not pursue" was deleted. Demis Hassabis, CEO of Google DeepMind, cited "an increasingly complex geopolitical landscape." By mid-2025, Google had been awarded a contract worth more than $200 million to provide AI agents to the Pentagon. The same company that cancelled a military AI contract after four thousand employees protested in 2018 was now actively building military AI seven years later.9

What changed between 2018 and 2025 was not the values. It was the pressure.

In 2018, search advertising was still growing. Google could afford to listen to four thousand employees and walk away from a Pentagon contract. The cost of honoring the values was manageable. In 2019, search revenue growth was slowing. The company could not afford to listen to one executive defending the quality of its core product. By 2025, military competition had accelerated and military AI contracts were worth hundreds of millions. The cost of honoring the original values had become unmanageable at every level.

The values did not fail because anyone stopped believing them. They failed because the incentive structure applied more pressure than the values could absorb. When the pressure exceeded the value, the value lost. The person who defended it was replaced. The person who replaced him came from the division whose revenue the value had been protecting against.

The person who states the value bears no cost when the value is overridden. The person who defends the value bears all of it. Gomes lost his position. The founders who wrote the IPO letter did not lose theirs.10

2018 4,000 employees cited the values.
Google listened. Maven cancelled.
2019 1 executive cited the values.
Google replaced him.
The difference was not the principle. It was the pressure on the revenue line.

The other room

The pattern is older than Google. It is older than corporations. In 1604, the Middle Rhine bakers' guild federation issued a decree: "The white-bakers shall completely refrain from all innovation in baking as it is customarily practised in the town." The stated purpose of the guild was quality. Train apprentices. Protect consumers from inferior goods. The decree did not protect consumers. It protected incumbents from anyone who might bake something better. In the Dutch Republic, urban shipbuilding guilds introduced no major design improvements after roughly 1630. Nearly all new ships were built in the Zaanstreek, the region where the guilds had no authority. Innovation happened where the value statement wasn't.11

Adam Smith, observing the descendants of this system in 1776, compressed it to one sentence: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."11

The stated value and the structural incentive occupied different rooms then. They occupy different rooms now. The rooms have better furniture.

Six injuries per hundred

Amazon has sixteen Leadership Principles. They are printed on the walls of every fulfillment center, recited in job interviews, referenced in performance reviews. The first principle is "Customer Obsession." "Leaders start with the customer and work backwards," it reads. The other fifteen follow from it.12

The customer's package arrives in one day. Sometimes the same day. The tracking updates in real time. The return is free. By the measure of the customer's experience, the value is real. Amazon's customer satisfaction scores are consistently among the highest of any company in the world.

Inside the fulfillment center, the walls carry the Leadership Principles. The floor carries the workers. Amazon's overall recordable injury rate is 6.5 per 100 full-time employees. The rate for non-Amazon warehouses of comparable size is 3.8. Seventy-one percent higher. A December 2024 report from the U.S. Senate's Health, Education, Labor and Pensions Committee found Amazon's warehouses had thirty percent more injuries than the industry average in 2023. Over the past seven years, Amazon workers have been nearly twice as likely to be injured as workers at comparable facilities.13

Amazon reports improvement. The company says its recordable injury rate dropped 39 percent over the past six years and 16 percent year over year. Independent analysis tells a different story. More than two-thirds of Amazon warehouses still exceed the industry average.14

The value and the cost are not separate problems with separate causes. They are structurally connected. In 2021, an internal Amazon study called Project Elderwand found that workers could make 1,940 repetitive movements in a ten-hour shift before lower-back injury risk increased. Amazon never implemented the recommended limits. The reason, according to a subsequent Senate investigation, was the potential impact on "customer experience." The speed that delivers the package in one day is the speed that produces the injury. The value generates the cost.15

In 2021, Amazon added two new Leadership Principles, bringing the total from fourteen to sixteen. One of them was "Strive to be Earth's Best Employer." The original fourteen had no principle addressing the conditions of the people who operated the system the other principles described. The absence was not an oversight. It was a reflection of which values the business model could simultaneously enforce.16

The company gains status from "Customer Obsession." Press coverage. Talent pipeline. Customer loyalty. The warehouse worker absorbs the gap between the stated value and the structural reality of delivering on it. The benefit flows to the institution. The cost flows to the person inside the institution who is closest to the operation and furthest from the values statement.17

A sublease

In August 2019, WeWork filed an S-1 with the Securities and Exchange Commission. The filing disclosed a net loss of more than $900 million for the first six months of the year. It also stated the company's mission: "to elevate the world's consciousness."18

The business underneath the mission was a commercial real estate sublease operation. WeWork leased office space at long-term rates, subdivided it, furnished it with glass walls and craft beer and communal tables, and subleased it at short-term rates with a markup. The unit economics were a bet that short-term rental income would consistently exceed long-term lease obligations. It did not.

Adam Neumann believed the mission. Employees believed it. Investors believed it. SoftBank valued the company at $47 billion. Neumann spoke about consciousness at conferences with the intensity of someone who had staked his identity on the idea.19

This is the case where the values were most real and the gap was widest. A real estate sublease dressed in the language of spiritual transformation. The sincerity did not close the gap between the mission statement and the business model. It widened it. Because the sincerity prevented anyone from asking whether the words in the prospectus had anything to do with the numbers on the same page.

WeWork's invented metric turned a $1.9 billion annual loss into a $467 million profit by excluding the cost of operating the business. The gap between the number and the reality is a different argument. The gap between the mission and the business model is this one. Both gaps lived in the same filing. Neither referred to the other.

In November 2023, WeWork filed for bankruptcy. Market capitalization at filing: roughly $45 million. Masayoshi Son, whose SoftBank had invested $18.5 billion, said: "It was foolish of me. I was wrong." The descent from $47 billion had taken less than five years.20

Both were real. They operated in different rooms. The mission was written in a room where the purpose of the company was discussed. The business model was built in a room where the economics of commercial real estate subleasing were calculated. Nobody in either room was required to check whether the two were connected.21

The report

In the summer of 2020, companies announced commitments. Dedicated pages appeared on corporate websites. New titles were added to the executive directory. Diversity, equity, and inclusion programs were expanded, funded, and publicized. Reports were published. Pledges were made. The visible response was substantial and nearly unanimous across the Fortune 500.

McKinsey had published a series of studies beginning in 2015 claiming a positive correlation between executive diversity and firm financial performance. Companies cited these studies when designing and announcing their programs. The research appeared to establish a business case. More diverse executive teams, McKinsey reported, were more likely to outperform on profitability.22

In March 2024, accounting professors Jeremiah Green of Texas A&M and John Hand of the University of North Carolina published a paper in Econ Journal Watch attempting to replicate McKinsey's results. McKinsey declined to share its data. Green and Hand reverse-engineered the datasets using publicly available information from S&P 500 firms.23

They could not replicate the findings.

They also identified a methodological problem. McKinsey had analyzed the data in the wrong direction. The studies tested whether diversity preceded performance. Green and Hand found that the causality ran the other way. Companies that were already performing well diversified their executive ranks afterward. The diversity followed the performance. The performance did not follow the diversity.23

A separate study at Harvard examined 829 companies over more than thirty years. Standard diversity training had "no positive effects in the average workplace." The researchers found something else. The relationship between how commonly a DEI practice was used and how effective it was ran in the wrong direction. The most widely adopted tools were the least effective. The practices that looked best in a report performed worst in the organization.24

The Chief Diversity Officer became the shortest-tenured member of the C-suite. Average tenure: 1.8 years, according to Russell Reynolds. The average for other C-suite executives: 4.9 years. For CEOs: 7. The attrition rate for DEI roles reached 33 percent, compared to 21 percent for non-DEI positions. The role did not exist at most companies before 2020. It was created, staffed, and in many cases eliminated within four years.25

The programs created a new category of institutional employment. Consulting firms sold the research that justified the programs, then sold the consulting to implement them. Training companies built businesses around the mandate. When the programs did not produce measurable change, the response at many organizations was not to reconsider the approach but to expand it, hire more staff, increase the budget. The failure of the program became the justification for more of the program. The people who designed the measurement were the people whose employment depended on the result.26

By the summer of 2024, sixty-three of the Fortune 100 had rebranded or eliminated DEI messaging from their websites. Fifty-four made the change after the November 2024 presidential election. Mentions of "DEI" in S&P 500 annual filings averaged four times in 2024, down from twelve and a half in 2022. Companies halved the number of DEI metrics tied to executive compensation.27

Walmart did not renew its $100 million, five-year commitment to a Center for Racial Equity formed after George Floyd's death in 2020. Boeing dismantled its global DEI department in late October 2024. Amazon removed DEI language from its annual report. Meta dissolved its internal DEI team. McDonald's ceased its set representation goals and renamed its diversity team.28

The programs were the visible layer. The pipeline, the promotion criteria, the cultural norms that determine who advances inside an organization: those are the structural layer. The programs addressed the visible layer. Whether the structural layer changed is the measurement that was not made. The report improved every year. More pages, more pledges, more data. Whether the org chart underneath it changed is the question nobody asked until a pair of accounting professors tried to replicate the study that justified the report in the first place.29

Fifty-four companies changed their messaging within weeks of an election. The speed of the reversal tells you the depth of the commitment. The values responded to the same incentive structure as every other business decision. When external pressure demanded them, they appeared. When external pressure reversed, they disappeared. Same mechanism as Google. Changed pressure, changed values.

The test

The distinction is not between companies that have values and companies that do not. Every company has values. The distinction is between values that describe a structural constraint and values that describe an aspirational position.

Twelve trillion

In 1975, Jack Bogle founded Vanguard with a structure the rest of the industry considered self-defeating. The company would be owned by the funds it managed. The funds would be owned by the people who invested in them. There would be no external shareholders. No private equity partners. No founding family extracting dividends. Every dollar saved on management fees would flow back to the investors, because the investors were the owners.30

The industry charged expense ratios averaging 0.73 percent at the time. Vanguard charged less and kept cutting. Five CEOs across fifty years. Bogle to Brennan to McNabb to Buckley to Ramji. Same structure. Same direction. In February 2025, Vanguard announced its largest expense ratio reduction in the company's history, saving investors more than $350 million in a single year. The average Vanguard fund charges roughly 0.08 percent. The industry average is still 0.44 percent. Vanguard manages more than $10 trillion in assets.31

The value has teeth because the structure does not permit the violation. A CEO who wanted to raise fees at Vanguard would be raising fees on the company's owners. The customers and the owners are the same people. There is no third party to capture the margin. The pricing discipline that some companies enforce through culture, Vanguard enforces through architecture. A cultural constraint can be overridden by a new leader. An ownership structure cannot be overridden without restructuring the company itself.32

Company Stated Value Mechanism Consequence of Violation
Vanguard Low cost for the investor Mutual ownership Structure prevents it
Google "Don't be evil" None Gomes replaced. Company continued.
Amazon "Customer Obsession" Speed metrics, not safety metrics Worker injuries. Customer satisfied.
WeWork "Elevate consciousness" None $47B to bankruptcy.
A constraint has consequences when violated. An aspiration has none. The distinction determines whether the value survives contact with the incentive structure.

Vanguard's ownership structure is not a values statement. It is the incentive structure. When the value and the incentive are the same thing, the value holds across leadership transitions, market pressures, and five decades of growth. When the value occupies one room and the incentive structure occupies another, the incentive wins. Every time. Because no one built a mechanism that forced the institution to keep it.32

The values were real. In every case.

Google meant "don't be evil." The founders wrote it into a filing with the Securities and Exchange Commission and put it on conference room walls. Amazon means "customer obsession." The customer gets the package in one day, every time. WeWork meant "elevate the world's consciousness." Adam Neumann believed it with the conviction of someone who had staked his identity on it. The companies that announced DEI commitments in 2020 were responding to something they believed mattered. The sincerity was real in each case.

The question was never sincerity. The question was whether the incentive structure enforced the value or contradicted it.

When they point in the same direction, the company compounds for decades. Five CEOs. Same structure. Same direction. When they point in opposite directions, the incentive wins. The person who defends the value is replaced. The person who serves the incentive is promoted. The business model absorbs the contradiction and continues operating. The value remains on the wall. The behavior moves to a different room.

The gap persists because the gap is useful. A company that publishes "work-life balance" or "people first" attracts candidates who value those things. Those candidates accept compensation that reflects the promise. If the actual culture runs on quarterly targets and eighty-hour weeks, the company acquired talent at a discount. The employee read the values statement as a promise. The company used it as a recruiting tool. Both readings were rational. The information was not the same.33

The gap between the stated value and the actual incentive is not a failure of communication between two rooms. It is an economic advantage that persists because closing it would cost more than maintaining it.

Constraints produce behavior. Aspirations produce press releases.

The values were real. They were always real. The incentive structure was somewhere else. And when the two rooms disagreed, it was never the room with the poster on the wall that won.34

New pieces when they're ready. Nothing else.

Sources

  1. "Don't be evil" adopted as an informal motto around 2000-2001. Paul Buchheit (creator of Gmail) coined it at an internal values meeting on July 19, 2001; Amit Patel also cited in some accounts. Written into Google's code of conduct. Steven Levy, In the Plex (2011); Wired; The New York Times.
  2. Google 2004 IPO Founders' Letter, "An Owner's Manual" for Google's Shareholders, Larry Page and Sergey Brin. Filed with the SEC as part of the S-1 registration statement. In 2015, Alphabet (new parent company) adopted "Do the right thing" in its code of conduct. Google's own code retained "Don't be evil" until April-May 2018, when it was quietly removed from the preface during the Project Maven controversy. Retained only in the final line: "And remember... don't be evil, and if you see something that you think isn't right, speak up!" Gizmodo, May 2018; 9to5Google; Time, October 2015; Fortune, October 2015.
  3. Project Maven (Algorithmic Warfare Cross-Functional Team): established April 2017. Employee petition reached 3,100 signatures by April 2018, exceeded 4,000 by May. Approximately 12 employees resigned. Letter to Pichai: "Google should not be in the business of war." CNBC, April 5, 2018; The New York Times, April 4, 2018; Engadget, May 14, 2018.
  4. Google announced it would not renew the Maven contract. Google executive told employees June 1, 2018. Pichai published AI ethical principles June 7, 2018: "We will not design or deploy AI in... technologies that cause or are likely to cause overall harm." Arms Control Association, July/August 2018; NBC News.
  5. Code Yellow declared February 2019. Approximately seven weeks. Engineers from Search and Chrome teams reassigned. Bloomberg, October 31, 2023; evidence from DOJ antitrust trial exhibits.
  6. Ben Gomes, head of Google Search, 2019 internal email: "I think we are getting too involved with ads for the good of the product and company." Also: "Negative strategies for users, such as turning off correction of misspelled keywords or not improving rankings, can easily increase queries. This is a method that should never be taken." Bloomberg, October 2023; Gizmodo; trial exhibits in United States v. Google LLC.
  7. Gomes replaced in 2020 by Prabhakar Raghavan, who came from Google's ads division. Jerry Dischler (ads executive) email: "I didn't want the message to be 'we're doing this thing because the Ads team needs revenue.'" Bloomberg; Ed Zitron, 2024.
  8. United States v. Google LLC, No. 1:20-cv-03010 (D.D.C.). Judge Amit Mehta. Ruling August 2024: Google maintained an illegal monopoly in general search. DOJ press releases; multiple legal analyses.
  9. Google removed the "Applications we will not pursue" section from its AI Principles website on February 4, 2025. Demis Hassabis quote: "There's a global competition taking place for AI leadership within an increasingly complex geopolitical landscape." Pentagon contract: Gemini-powered AI agents, $200M+ ceiling, awarded July 2025. GenAI.mil deployed December 2025. Washington Post; CNBC; TechCrunch; Axios.
  10. Thomas Sowell, Knowledge and Decisions (1980). The concept of residual claimants: "The critical variable in any system is not the quality of the people but the incentive structure they operate within." The person who bears the consequence of being wrong self-corrects. The person insulated from consequences does not. The employee who defends the value is the residual claimant. The institution that states the value is not.
  11. Middle Rhine bakers' guild decree, 1604: "The white-bakers shall completely refrain from all innovation in baking as it is customarily practised in the town." Cited in Sheilagh Ogilvie, The European Guilds: An Economic Analysis (Princeton University Press, 2019). Ogilvie's dataset comprises more than 17,000 observations on craft guilds across Europe. Dutch shipbuilding guilds: no major design improvements after approximately 1630; nearly all new ships built in the guild-free Zaanstreek (Ogilvie, Chapter 8). Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Book I, Chapter X, Part II.
  12. Amazon Leadership Principles: 16 total. Originally 14; two added in July 2021 ("Strive to be Earth's Best Employer" and "Success and Scale Bring Broad Responsibility"). "Customer Obsession" is #1: "Leaders start with the customer and work backwards." aboutamazon.com.
  13. Amazon overall recordable injury rate: 6.5 per 100 full-time employees. Non-Amazon warehouses with 1,000+ employees: 3.8. Amazon rate 71% higher. U.S. Senate HELP Committee report, December 2024: Amazon warehouses had 30% more injuries than industry average in 2023. CNBC, April 12, 2023; Strategic Organizing Center; Washington Post, June 1, 2021; Senate HELP Committee.
  14. Amazon claims 39% improvement over six years, 16% year-over-year. More than two-thirds of Amazon warehouses still exceed industry average. aboutamazon.com (2025 safety report); independent analysis by Strategic Organizing Center and Senate HELP Committee.
  15. Project Elderwand: internal Amazon study (2021) found workers could make 1,940 repetitive movements in a ten-hour shift before lower-back injury risk increased. Amazon did not implement the recommended limits. U.S. Senate HELP Committee 18-month investigation (December 2024), based on review of seven years of data and interviews with more than 130 workers. NPR; Sanders.senate.gov; GeekWire.
  16. Amazon added two Leadership Principles in July 2021, bringing total from 14 to 16. The additions came after years of criticism about warehouse working conditions. Amazon also removed DEI language from its 2024 annual report. Multiple sources including HR Brew, Fortune.
  17. Rob Henderson, "Luxury Beliefs" (2019, expanded in Troubled: A Memoir of Foster Care, Family, and Social Class, 2024). Henderson describes luxury beliefs as ideas and opinions that confer status on the holder while imposing costs on those with fewer resources. The framework was developed for individual status signals. The institutional version operates identically: the company gains status from stating the value, the worker bears the cost of operating underneath it.
  18. WeWork S-1 filed August 14, 2019. "Our mission is to elevate the world's consciousness." Net loss exceeding $900 million for first six months of 2019. CNBC, August 14, 2019; Axios, August 15, 2019; SEC filing.
  19. WeWork peak valuation: $47 billion (SoftBank, January 2019). S-1 filed August 2019. IPO withdrawn September 2019. Neumann stepped down as CEO September 2019. SoftBank rescue valuation: approximately $8 billion. Public via SPAC October 2021. Multiple sources.
  20. WeWork filed for Chapter 11 bankruptcy November 6, 2023. Market capitalization at filing: approximately $45 million. Masayoshi Son, SoftBank earnings call: "It was foolish of me. I was wrong." SoftBank had invested approximately $18.5 billion. NPR, November 6, 2023; multiple financial press.
  21. Warren Buffett, 1989 Berkshire Hathaway Annual Letter to Shareholders. The institutional imperative: "(3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops." The values statement is one such direction. The organization rationalizes it. The rationalization follows regardless of whether the values match the incentive structure.
  22. McKinsey & Company, "Diversity Wins" (2020), "Delivering Through Diversity" (2018), "Diversity Matters" (2015). The series claimed companies in the top quartile for executive diversity were more likely to outperform on profitability.
  23. Green, Jeremiah, and John R. M. Hand. "McKinsey's Diversity Matters/Delivers/Wins Results Revisited." Econ Journal Watch, Vol. 21, Issue 1, March 2024, pp. 5-34. McKinsey declined to share data. Green and Hand reverse-engineered datasets from S&P 500 firms. Could not replicate McKinsey's results. Found the causality ran in the opposite direction: firm financial performance predicted subsequent executive diversification, not the reverse. "McKinsey's studies should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives."
  24. Dobbin, Frank, and Alexandra Kalev. "Why Diversity Programs Fail," Harvard Business Review, July-August 2016. Updated in Getting to Diversity (Harvard University Press, 2022). 829 companies, more than 30 years. Standard diversity training had "no positive effects in the average workplace." The correlation between how widely adopted a DEI practice was and its measured effectiveness was negative: the most common tools were the least effective. What worked: formal mentoring, targeted recruitment, and diversity task forces that gave managers ownership of outcomes rather than compliance.
  25. CDO average tenure: 1.8 years (Russell Reynolds Associates). Other C-suite average: 4.9 years. CEO average: 7 years. DEI role attrition rate: 33% vs. 21% for non-DEI roles (Revelio Labs). Fortune, January 10, 2024; Business Chief.
  26. The self-reinforcing cycle of institutional programs that employ their own designers is described in Sowell's The Vision of the Anointed (1995): policies are evaluated by the intentions of their designers rather than by their measurable outcomes, and failure is treated as evidence that more resources are needed rather than that the approach is wrong. The pattern applies to DEI programs, corporate training mandates, and any institutional initiative where the people measuring effectiveness are the people whose employment depends on the program's continuation.
  27. 63 of Fortune 100 companies rebranded or eliminated DEI messaging from websites since summer 2024. 54 made changes after November 2024 presidential election. "DEI" mentions in S&P 500 10-K filings averaged 4 times in 2024, down from 12.5 in 2022. Companies halved DEI metrics tied to executive compensation. HR Brew, January 6, 2026; Fortune, February 14, 2025.
  28. Walmart: did not renew $100 million, five-year commitment to Center for Racial Equity (formed 2020). Boeing: dismantled global DEI department late October 2024 (Bloomberg, October 31, 2024). Amazon: removed DEI language from annual report. Meta: dissolved internal DEI team. McDonald's: ceased set representation goals, renamed diversity team "global inclusion team." Multiple sources including Fortune, HR Brew, Ongig Blog.
  29. James C. Scott, Seeing Like a State (1998). Legibility: the process by which institutions simplify complex realities into standardized, readable categories. The values statement functions as a legibility project: it makes the company visible and readable to stakeholders (employees, investors, customers, press) by presenting a simplified version of what the company is. The actual incentive structure, the structural layer, is what the simplification leaves out.
  30. Vanguard founded 1975 by John C. Bogle. Mutual ownership structure: The Vanguard Group is owned by its funds, which are owned by their investors. No external shareholders. Industry expense ratios averaged 0.73% in 1975. Vanguard's own history page; Bogleheads wiki; corporate.vanguard.com.
  31. CEO succession: John Bogle (1975-1996), John Brennan (1996-2008), William McNabb (2008-2018), Tim Buckley (2018-2024), Salim Ramji (July 2024-present). Five CEOs, same structure, same direction. AUM approximately $10-12 trillion as of 2025. February 2025 expense ratio reduction: largest in company history, saving investors $350M+. Average Vanguard expense ratio approximately 0.08% vs. industry average 0.44%. Vanguard press release, February 3, 2025; Morningstar; Statista.
  32. The "Vanguard Effect": Bogle's mutual ownership model created competitive pressure that lowered fees across the entire investment industry. The structural mechanism is the same one Nick Sleep described as "scale economics shared" in the Nomad Investment Partnership Letters (2001-2014): pass savings to customers, create a compounding flywheel. The difference is enforcement. Sleep's examples (including Costco and Amazon) enforce through culture and operating discipline. Vanguard enforces through ownership architecture. The value and the incentive structure are not just aligned. They are the same thing.
  33. Frederic Bastiat, "That Which Is Seen and That Which Is Not Seen" (1850). "Every economic act produces a visible and an invisible effect." The visible effect is the immediate beneficiary. The invisible effect is what would have happened otherwise. In corporate values: what is seen is the values statement, the DEI report, the Leadership Principles poster, the "best places to work" ranking. What is unseen is the incentive structure that may contradict them. The values statement as a labor market pricing mechanism follows from Sowell's observation in Knowledge and Decisions (1980) that knowledge and decision-making authority rarely reside in the same place. The company knows the actual promotion criteria, the compensation headroom, the cultural reality. The candidate knows the values statement. Both act rationally on different information.
  34. The gap between stated values and actual incentive structures is not unique to corporations. Universities, governments, and nonprofits all publish values their operating structures contradict. The corporate version is the most visible because the institution made itself visible: filing values with regulators, printing them on walls, citing them in earnings calls. The mechanism is institutional, not corporate.