Disclosing Corporate Diversity

61 Pages Posted: 17 Mar 2022 Last revised: 5 Aug 2022

Date Written: February 14, 2022

Abstract

Disclosures can be used to increase diversity in corporate America in terms of race, gender, sexual orientation, and disability. Scholars and policymakers have underappreciated this possibility because diversity is often omitted from the larger Corporate Social Responsibility (“CSR”) or Environmental Social and Governance (“ESG”) disclosures context, even though as this Article empirically shows, public companies often make diversity disclosures in that context.

Diversity disclosures are important not only for shareholders’ interests in transparency, but also for the benefit of other stakeholders, including employees, customers, and the communities in which companies operate, who want to know whether companies are diverse to determine where to work, what brands to buy, and what companies value. The literature has yet to explore the significance of diversity disclosures for the benefit of all these stakeholders.

Legal reform is needed to use disclosures to improve corporate diversity for the benefit of all stakeholders. Policymakers must go beyond the confines of the securities laws to translate disclosure into societal change. Congress is considering legislation to establish a diversity disclosure rule. However, the bill is flawed because it lacks forward-looking provisions that can be used to improve diversity. What is needed are disclosure rules with statistical and forward-looking provisions that this Article proposes. With these provisions, shareholder and employee activists, and others can use diversity disclosures to pressure companies to improve diversity incrementally on an annual basis.

Keywords: corporations, corporate social responsibility, diversity, ESG

Suggested Citation

Adediran, Atinuke O., Disclosing Corporate Diversity (February 14, 2022). Virginia Law Review, Vol. 109, 2023, Fordham Law Legal Studies Research Paper No. 4016752, Available at SSRN: https://ssrn.com/abstract=4016752

Atinuke O. Adediran (Contact Author)

Fordham University School of Law ( email )

140 West 62nd Street
New York, NY 10023
United States
2126366843 (Phone)
10023 (Fax)

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