That problems of nepotism, or cronyism have already existed to some extent, is another conversation.
I also don't know why "merit" is in quotes. Hiring based on merit is going to be the main goal for companies that are not corrupt.
Corruption should also be discouraged e.g. by stopping companies becoming "too big to fail", or by being anti-competitive, or by actually creating legislation that actually protects against discrimination, rather than by perpetuating it.
That corruption exists, is not an argument to ignore corruption in another form.
"Merit" as I understand it—who can best perform the job—has almost never been the primary hiring characteristic. Companies are comprised of people and those people are almost always the ones making the ultimate decisions. In hiring, this means that "merit" almost always means something different or is a secondary consideration behind more personal factors. "Is diverse" doesn't really strike me as inherently more corrupt a trait than "went to the same school I did" or "is a member of the same country club I am," though why it gets a lot more attention is certainly not a mystery.
You seem to be discounting the meritocratic process by which people end up graduating from high-ranking schools. Prestigious law firms for instance will only consider graduates from specific institutions, specifically because they act as a filter for talent and ability.
You also seem to be conflating the hiring of people who are culturally similar to corruption. In fact there are many benefits in collaborating in a culturally homogenous environment. Maintaining such an environment in order to reap those benefits has merit too.
The "meritocratic process" is laughable. Legacy admissions have always been a critical component of those systems, especially once wealth was no longer an adequate filter; allowing a few newbies through the sieve in order to conceal the real purpose of the ivies—perpetuation of an elite caste—has been the game for a long time. As universities are pressured from the left (getting rid of standardized testing) and right (getting rid of any sort of racial consideration in admissions), legacy will only become more important as an attribute. That a few people beat the odds doesn't at all imply that the system is fair or that that solution is scalable.
"Culture fit" is realistically both important and historically has been a really problematic thing to conflate with or consider alongside "merit." It is a tough problem and I don't have a great answer to it.
Please read some autobiographies of people from diverse backgrounds trying to break into atypical careers, the topic of imposter syndrome and anxieties about wanting to be taken on one's own merits regularly features.
The deeper problem is that there isn't really a solution here. The old system wasn't neutral and instead actively discriminated against huge swathes of the population. That the beneficiaries of that system never doubted their worthiness doesn't make the old system better, and any change that impacts them will suffer from the same aspersions about a lack of "merit" that we are seeing now.
What would be an example of a company where “those people” (who comprise the company) are not making “the ultimate decisions”?
If 100 applicants are rejected for byzantine/opaque reasons without ever being reviewed by a person, I think it is not unreasonable to characterize those exclusions as decisions not being made by the people in the company. Of course, someone in the company did decide to implement and use the filter, so I wouldn't argue the point very strongly.
