Corporate Reporting under the U.S. Securities and Exchange Commission's Diversity Disclosure Rule: A Mixed-Methods Content Analysis

Dhir, A. (2015). Corporate Reporting under the U.S. Securities and Exchange Commission’s Diversity Disclosure Rule: A Mixed-Methods Content Analysis. Chapter 6 in Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity. New York: Cambridge University Press. Forthcoming.

Osgoode Legal Studies Research Paper No. 66/ 2014

Yale Law School, Public Law Research Paper No. 516

34 Pages Posted: 30 Aug 2014 Last revised: 3 Oct 2014

See all articles by Aaron A. Dhir

Aaron A. Dhir

Osgoode Hall Law School ; Yale Law School

Date Written: 2015

Abstract

This is chapter 6 of Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity (Cambridge University Press, forthcoming in 2015). In this chapter I investigate the disclosure-based approach to addressing diversity in corporate governance. In 2009, the United States Securities and Exchange Commission adopted a rule requiring publicly traded firms to report on whether they consider diversity in identifying director nominees and, if so, how. The rule also requires firms that have adopted a diversity policy to describe how they implement the policy and assess its effectiveness. The rule does not define “diversity,” however, leaving it to corporations to give this term meaning.

I present findings from my mixed-methods content analysis of corporate disclosures submitted during the first four years of the rule in order to provide empirical elucidation of how the rule operates in practice. The research sample consists of a hand-collected dataset of the 2010–2013 definitive proxy statements of S&P 100 firms. I am interested in learning how these firms, in responding to the rule, construct the concept of diversity through their public discourse. What does diversity, viewed through the prism of legal regulation, mean to market participants? How do they interpret and understand this socio-political idea in the absence of a regulatory definition? How is diversity constituted and discursively performed?

The SEC’s disclosure rule has caused US corporations to establish a vocabulary of diversity. My study shows that “diversity” carries multiple connotations for these firms. My most salient finding, however, is that when interpreting this concept in the absence of regulatory guidance, the dominant corporate discourse is experiential rather than identity-based. Firms most frequently define diversity with reference to a director’s prior experience or other nonidentity-based factors rather than his or her socio-demographic characteristics.

The data provide a unique window into the potential meanings of “diversity” in the corporate governance setting, as well as the limits of a strategy that permits corporations to give the term their own definition.

Keywords: Corporate governance, securities law, diversity, disclosure, United States Securities and Exchange Commission, socio-legal research, mixed-methods content analysis

JEL Classification: K22, J71, G34, G38

Suggested Citation

Dhir, Aaron A., Corporate Reporting under the U.S. Securities and Exchange Commission's Diversity Disclosure Rule: A Mixed-Methods Content Analysis (2015). Dhir, A. (2015). Corporate Reporting under the U.S. Securities and Exchange Commission’s Diversity Disclosure Rule: A Mixed-Methods Content Analysis. Chapter 6 in Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity. New York: Cambridge University Press. Forthcoming.; Osgoode Legal Studies Research Paper No. 66/ 2014; Yale Law School, Public Law Research Paper No. 516. Available at SSRN: https://ssrn.com/abstract=2488154

Aaron A. Dhir (Contact Author)

Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
(416) 736-5224 (Phone)
(416) 736-5736 (Fax)

HOME PAGE: http://www.osgoode.yorku.ca/faculty-and-staff/dhir-aaron-a/

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
(203) 432-8294 (Phone)

HOME PAGE: http://www.law.yale.edu/faculty/ADhir.htm

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