Voluntary Disclosure of Workforce Gender Diversity

45 Pages Posted: 10 Jan 2022 Last revised: 26 May 2022

See all articles by Chuchu Liang

Chuchu Liang

University of California, Irvine - Paul Merage School of Business

Ben Lourie

University of California, Irvine

Alexander Nekrasov

University of Illinois Chicago

Il Sun Yoo

University of California, Irvine

Date Written: May 25, 2022

Abstract

We examine the managerial incentives to voluntarily disclose the gender diversity of a firm’s workforce. When examining disclosure incentives, one key challenge is the difficulty of observing mangers’ information for nondisclosers. We overcome this challenge by using novel data extracted from employees’ online profiles to infer gender diversity without relying on the availability of firms’ public disclosure. After controlling for industry gender diversity, we find that firms are more likely to disclose gender diversity when women comprise a higher proportion of their workforce. This finding is consistent with managerial incentives to disclose favorable information. However, disclosure is more prevalent in industries with a low proportion of female employees, which is consistent with a higher demand for disclosure when firms operate in a poor gender diversity environment. Regarding the potential benefits of disclosure, we find that disclosing firms (a) enjoy more favorable media coverage of the firm’s diversity and inclusion, and (b) attract a larger number of gender-lens ESG funds investing in the firm’s stock. Disclosing firms with a high proportion of female employees enjoy greater benefits. Overall, our study broadens our understanding of the evolving corporate disclosure landscape by providing evidence on firms’ incentives to disclose the gender diversity of their workforce.

Keywords: voluntary disclosure; workforce gender diversity; corporate social responsibility (CSR), environmental, social, and governance (ESG); CSR ratings; CSR media tone; ESG funds

Suggested Citation

Liang, Chuchu and Lourie, Ben and Nekrasov, Alexander and Yoo, Il Sun, Voluntary Disclosure of Workforce Gender Diversity (May 25, 2022). Available at SSRN: https://ssrn.com/abstract=3971818 or http://dx.doi.org/10.2139/ssrn.3971818

Chuchu Liang

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697
United States

Ben Lourie

University of California, Irvine ( email )

Irvine, CA 92697-3125
United States

Alexander Nekrasov (Contact Author)

University of Illinois Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

HOME PAGE: http://business.uic.edu/profiles/alexander-nekrasov/

Il Sun Yoo

University of California, Irvine ( email )

Paul Merage School of Business
Irvine, CA 92697-3125
United States

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