The Instrumental Case for Corporate Diversity

28 Pages Posted: 17 Feb 2022 Last revised: 24 Feb 2022

See all articles by Naomi Cahn

Naomi Cahn

University of Virginia School of Law

June Carbone

University of Minnesota - Twin Cities - School of Law

Nancy Levit

University of Missouri at Kansas City - School of Law; University of Missouri at Kansas City - School of Law

Date Written: February 16, 2022

Abstract

The moral case for diversity in businesses is compelling. The business case for diversity (that “diverse companies do better”) is mixed: studies in the business literature do not prove that simply adding diversity causes the improvement; instead, they posit that the improvement is likely to be “endogenous,” that is, the factors that encourage and sustain diversity, such as greater transparency, also improve financial performance. In this article, we make what we call “the instrumental case for diversity.” If the same factors that correlate with greater diversity also correlate with improved performance, then greater diversity can be a benchmark for better corporate management. It can make diversity metrics a tool (though not necessarily an exclusive or necessary tool) in measuring the reform of dysfunctional corporate cultures. Diversity might then become part of an iterative process; maintaining diversity will require management reforms such as greater transparency that will in turn fuel transformations in management cultures that further both greater diversity and better overall performance.

Keywords: diversity, endogenous factors, diversity metrics, corporate culture

Suggested Citation

Cahn, Naomi R. and Carbone, June and Levit, Nancy, The Instrumental Case for Corporate Diversity (February 16, 2022). Journal of Law & Inequality, Virginia Public Law and Legal Theory Research Paper No. 2022-14, Available at SSRN: https://ssrn.com/abstract=4036859

Naomi R. Cahn

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

June Carbone

University of Minnesota - Twin Cities - School of Law ( email )

229-19th Avenue South
Minneapolis, MN 55455
United States

Nancy Levit (Contact Author)

University of Missouri at Kansas City - School of Law ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

University of Missouri at Kansas City - School of Law ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

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