Compass Diversified - 1792 Exchange

Rating Overview

Compass Diversified is Medium Risk.

Compass Diversified is Medium Risk. The company often yields to political activism in shaping corporate governance, potentially alienating consumers, dividing employees, and harming shareholders. Compass Diversified implements race and identity-based policies that replace merit, excellence, and integrity with preferential treatment and outcomes. The company occasionally embraces corporate initiatives that redirect its central focus from business goals to partisan policies and divisive issues at times. This approach fails to safeguard free exercise, free speech, and free enterprise.

Rating Criteria

Corporate Weaponization Risk Levels
Criteria	Risk Level
Cancellations	Medium Risk
Discriminatory Philanthropy	Lower Risk
Employment Protection	High Risk

Corporate Weaponization ⓘ

Corporate Governance and Public Policy Risk Levels
Criteria	Risk Level
Advocacy Bias	High Risk
Funding	Lower Risk
Political Actions	No Data

Corporate Governance and Public Policy ⓘ

Rating Criteria Detail

Criteria Risk Level Rationale

Corporate Weaponization

Criteria:

Has canceled customers, suppliers, or vendors due to their political views or religious beliefs OR corporately boycotts, divests, or sanctions regions, people groups, or industries.

Risk Level:

Medium

Rationale:

Compass Diversified integrates ESG into its business practices. From its 2023 Sustainability Report: “Our investment team plays a pivotal role in this framework. They are tasked with the integration of ESG-related risks and opportunities throughout our investment process” (1). However, the company has not canceled customers, suppliers, or vendors based on political views or religious beliefs (2).

Criteria:

Charitable giving (including employee matching programs) policies or practices discriminate against charitable organizations based on views or religious beliefs.

Risk Level:

Lower

Rationale:

Compass Diversified does not appear to discriminate against charitable organizations based on views or beliefs (1)(2).

Criteria:

Employment policies fail to protect against viewpoint or other discrimination and/or are ideological in nature.

Risk Level:

High

Rationale:

Compass Diversified’s subsidiary, Ergobaby, requires its employees to take unconscious bias, allyship, and DEI training (1). Compass Diversified appears to prioritize diversity over merit in its leadership composition. From its 2023 Sustainability Report: “The Board’s Nominating and Corporate Governance Committee includes diversity in its criteria for selecting and evaluating director candidates” (2). The company does not provide viewpoint protections for its employees (3).

Corporate Governance and Public Policy

Criteria:

Uses corporate reputation to support causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

Compass Diversified supports DEI within its business practices. From its Citizenship Statement: “CODI is supportive of Diversity, Equity and Inclusion (‘DEI’) initiatives across the Company” (1). The company supports ESG within its business practices. From its 2023 Sustainability Report: “This report underscores our
belief that ESG is an ongoing commitment, and we
are dedicated to achieving substantial, deliberate
progress. In recent years, our ESG efforts have
led to significant achievements” (2).

Criteria:

Uses corporate funds to advance ideological causes, organizations, or policies hostile to freedom of expression.

Risk Level:

Lower

Rationale:

Compass Diversified has not used corporate funds to advance ideological causes, organizations, or policies (1).

Criteria:

Uses corporate political actions and/or financial contributions for ideological, non-business purposes.

Risk Level:

N/A

Rationale:

Compass Diversified does not operate a PAC or engage in lobbying at this time (1)(2)(3).