Costco’s board has rejected a shareholder request to abandon its diversity, equity and inclusion (DEI) policies. Shareholders called on the board to eliminate its “illegal discrimination” program.

The Costco board responded to a number of shareholders and recommended voting against a proposal to “report on the risks of maintaining DEI efforts.” Newsweek reported.

The shareholders had expressed the suspicion that the company’s employees could be victims of “illegal discrimination because they are white, Asian, male or heterosexual”. They argued that defending against lawsuits could result in tens of billions of dollars in legal costs.

“Our board has reviewed this proposal and believes that our commitment to a company based on respect and inclusion is appropriate and necessary,” the board said in a statement. “Our success at Costco Wholesale is based on service to our key stakeholders: employees, members and suppliers. Our diversity, equity and inclusion efforts follow our Code of Ethics.”

The board added that it wants to ensure that all of its more than 300,000 employees “feel valued and respected” and that a diverse workforce allows Costco to have greater insight and creativity in what the company offers in stores.

The board further noted that customers “can see themselves reflected in the people they interact with in our warehouses.”

“Diversity in our supplier base, including consideration of small businesses, is beneficial for many of the same reasons that diversity benefits our company,” the board said. “We believe it encourages creativity and innovation in the goods and services we offer our members.”

Shareholders argued that the Supreme Court had ruled in this case Students for Fair Admissions v. Harvard found that Harvard’s use of race in selecting who to admit to the school violates the 14th Amendment.

The shareholder proposal also noted that a Starbucks executive won a $25.6 million lawsuit after claiming she was fired because she was white.

“It is clear that DEI poses litigation, reputational and financial risks to the company and therefore financial risks to shareholders,” the proposal says. “And yet Costco still has such a program, even though the company was concerned enough to recognize it when it recently and quietly renamed its DEI program to People and Communities.”

The board noted that it “regularly evaluates” the procedures the company uses to “comply with the law, including evolving Supreme Court decisions.”

“We believe our diversity, equity and inclusion efforts are legally appropriate, and nothing in the proposal proves otherwise,” the board added. “However, our focus on diversity, equity and inclusion serves not only to improve our financial performance, but also to improve our culture and the well-being of the people whose lives we impact.”

The annual shareholder meeting is scheduled to be broadcast live on January 23 at 5:00 p.m. ET. A portion of the meeting will be devoted to voting on the proposal “provided it is properly presented at the meeting.” Only those who were already shareholders before November 15th are entitled to vote.