Decoding Social Disclosure Decisions: A Field Experiment with Workforce Diversity Data

In recent years, U.S. public companies have increasingly begun to voluntarily disclose official workforce diversity data (i.e., EEO-1 reports), which they previously only confidentially filed with the U.S. Equal Employment Opportunity Commission (EEOC). To understand the factors leading these corporations to release this information publicly, we conduct a field experiment by reaching out to Investor Relations (IR) and Human Resources (HR) personnel at about 4,000 large US firms that currently do not publicly disclose their EEO-1 reports. We experimentally vary the information content of our requests and find that companies are more likely to respond when directly considering investors’ rather than employees’ informational needs. On the other hand, we do not find any evidence that companies are more likely to respond when directly considering S&P 100 firms’ disclosure decisions. We also show that IR departments are significantly involved in this disclosure process as well as HR departments and that a temporary regulatory action by the Office of Federal Contractor Compliance Programs does not lead to continuous workforce diversity disclosures. Our follow-up survey indicates that companies consider both shareholder welfare and equity value, as well as the potential litigation costs, when making social disclosure decisions. Taken together, our results are relevant to the debate concerning consequences of the financial (shareholder) and double (stakeholder) materiality of non-financial disclosure.