How to Develop Investor-Approved Diversity Disclosures
As requirements on diversity disclosure become more standardized, investors want to know how companies are integrating this sustainability factor in their strategies. And they are treating a lack of disclosure on gender and ethnic diversity as a risk. Specifically, investors are becoming increasingly upfront in their push for more data on female and visible minorities’ representation on boards, executive teams, and within the workforce.
There are several good reasons for their requests. The emerging consensus among shareholders is that robust information on gender and ethnic composition leads to the development of stronger human capital and inclusion strategies. Perhaps more important, public, upfront sharing of the information can help keep activists at bay and prevent them from targeting your company.
In the U.S., a well-established format is becoming the standard for disclosure and a favorite among investors. The Equal Employment Opportunity Voluntary Self Identification Form (EEO-1 Form) is something your company is already using to comply with Equal Employment Opportunity Commission (EEOC) rules.
Additionally, companies are expected to show how women and members of certain ethnicities are represented at the board of director level, the executive suite, management, and the overall workforce. In other words, investors want to make sure it is not just entry level positions where you are onboarding diverse employees. Giving a detailed breakdown allows stakeholders to evaluate if the company has an open culture where professional advancement is not hampered by discrimination.
Below are a few examples of companies that have leveraged a variety of workforce data in their diversity reporting.
Colgate-Palmolive Company
Diversity, Equity & Inclusion Results
- Global Representation by Gender (Overall and Executives)
- U.S. Representation by Ethnicity (Overall)
- U.S. Representation by Ethnicity (Professionals/Operators; Managers/Individual Contributors; Senior Managers/Directors; Executives)
The Clorox Co.
- Gender Diversity (%)
- Gender Parity at Director Level (%)
- Employee Breakdown by Ethnicity (US Only)
- Number of Females on the Board
- Breakdown of Gender/Level of Associate (Asia, EMEA, Latin America and US/Canada)
L’Oreal SA
- Women in Top Management – 2010 v 2019 (Executive Committee; Leadership Positions; Global Brand General Managers)
- Women Career Development – 2010 v 2019 (Promotions; Training; Expatriates)
- Gender – % of Total Workforce (2010 v 2019)
- Gender – % of Managers (2010 v 2019)
- Gender – % of Board Members (2010 v 2019)
- Median Gender Salary Gap (France only; 2007 to 2019)
- Parental Leave in 2020 (France, U.S., UK and Sweden)
- Employees with Disabilities (Global and France)
- Employees with Multicultural Background
- Social Sourcing (Women and People with Disabilities)
- People engagement
VF Corporation
Made for Change Report (Sustainability & Responsibility Report)
- Gender Diversity (%)
- Gender Parity at Director Level (%)
- Employee Breakdown by Ethnicity (US Only)
- Number of Females on the Board
- Breakdown of Gender/Level of Associate (Asia, EMEA, Latin America, and US/Canada)
Robust and thoughtful diversity and inclusion disclosure that gets into the specifics about where your company stands now and where it hopes to be in the future is not only good for your investor relations; it is good for your organization overall. Keep in mind that investors are looking for this information not just to check a box. They are viewing it as a critical indicator as to how well a company is positioned to meet the needs of an increasingly diverse customer base. When you frame the issue this way in your own strategic initiatives, it sets the stage for a human capital strategy that can significantly improve performance and valuation alike.
Learn how ESG Infinite can help you prepare investor-approved diversity disclosures.