September 25, 2023
American Psychological Association recently published an article featuring Associate Professor of Management and Organizations, Evan Apfelbaum, discussing his research on the benefits of companies disclosure of racial diversity efforts.
According to the study, companies that acknowledge their struggles with diversity are perceived as more trustworthy and committed. Following the murder of George Floyd, many companies have committed to increasing racial diversity in their workforces, but few have released employee diversity statistics. During this study, 30 major corporations disclosed their racial diversity data in annual reports to the U.S. Equal Employment Opportunity Commission. Only 3% of senior management positions were held by Blacks, and 4% by Hispanics/Latinos, according to the reports.
Apfelbaum states, “Companies’ concerns about their reputation are legitimate, but our findings suggest that their intuition that transparency will harm their reputation may be incorrect and that the opposite may be true.”
Ultimately the reports showed a slight improvement in racial diversity. Compared to participants who didn’t read the diversity reports, those who did viewed those companies as more transparent, trustworthy, and committed to diversity.