Voluntary Disclosure of Workforce Gender Diversity

Abstract

We examine managerial incentives to disclose the gender diversity of a firm’s workforce. We exploit information from employees’ online profiles to infer managers’ information about gender diversity for nondisclosing firms. Within industry, we find that firms are more likely to disclose gender diversity when women comprise a higher proportion of their workforce, consistent with managerial incentives to disclose favorable information. However, disclosure is more prevalent in industries with a low proportion of female employees, consistent with a higher demand for disclosure in a poor gender diversity environment. Regarding the potential benefits of disclosure, disclosing firms (a) enjoy more favorable media coverage of the firm’s diversity, and (b) attract a larger number of gender-lens ESG funds. 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 workforce gender diversity.

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