(Diversity) Equity and Inclusion
FEB-RN Research Paper No. 07/2024
European Corporate Governance Institute – Finance Working Paper No. 913/2023
Proceedings of the EUROFIDAI-ESSEC Paris December Finance Meeting 2023
57 Pages Posted: 1 May 2023 Last revised: 6 Sep 2023
There are 2 versions of this paper
(Diversity) Equity and Inclusion
Diversity, Equity, and Inclusion
Date Written: August 30, 2024
Abstract
This paper measures diversity, equity, and inclusion (DEI) using proprietary data from survey responses used to compile the Best Companies to Work For list. We identify 13 of the 58 questions as being related to DEI, and aggregate the responses to form our DEI measure. This variable has low correlation with gender and ethnic diversity in the boardroom, in senior management, and within the workforce, suggesting that DEI captures additional dimensions missing from traditional measures of demographic diversity. DEI is also unrelated to general workplace policies and practices, suggesting that DEI cannot be improved by generic initiatives. DEI is associated with higher future accounting performance across a range of measures, higher future earnings surprises, and higher valuation ratios, but demographic diversity is not. DEI perceptions among professional workers, such as R&D employees, are significantly correlated with the number and quality of patents. However, DEI exhibits no link with future stock returns.
Keywords: Diversity, Equity, Inclusion, ESG, CSR, Responsible Business, DEI
JEL Classification: G12, G32, J53, J71, J81
Suggested Citation: Suggested Citation