Corporate governance and diversity management: evidence from a disclosure perspective

Abstract

Purpose: Using textual analysis, this paper aims to measure diversity management disclosure; it also explore the relationship between corporate governance and diversity management disclosure. Design/methodology/approach: The study is based on a sample of the UK FTSE all-share non-financial organisations over the period from 2013 to 2019. We used a computer-aided textual analysis, and we used a bag of words to score the sample annual reports. Findings: The results show that the mean of the diversity management disclosure level is very low. Also, there is a positive relationship between the board size, women on board and board independence and the level of diversity management disclosure. The relationship is higher with more board members, women on board and more independent directors, aligning with previous literature. Practical implications: The implications of this research affect stakeholders and organisations which reflects the importance of communicating diversity practices and researchers by facilitating measuring objectively firms’ diversity management practices that have not been applied previously in the field of diversity. Originality/value: With different incidents taking place around the globe, such as the incident of George Floyd and the increased attention to diversity, organisations are under increasing social and political pressure to reflect on their diversity management practices. Previous literature has examined firms’ diversity practises from different perspectives, but to the best of the authors’ knowledge, this is the first paper to measure diversity management disclosure.