Diversity at Work: Firms’ Strategic Responses to Mandatory Diversity Disclosure

TY - JOUR

T1 - Diversity at Work

T2 - Firms’ Strategic Responses to Mandatory Diversity Disclosure

AU - Oelrich, Sebastian

AU - Siebold, Nicole

AU - Ketelhut, Klemens

N1 - Publisher Copyright: © 2024, American Accounting Association. All rights reserved.

PY - 2024/3

Y1 - 2024/3

N2 - Diversity has emerged as a topic of increasing organizational and legislative relevance. Despite forming a burgeoning research field in accounting, little is known about how organizations respond to diversity disclosure legislation. In this paper, we study the introduction of diversity disclosure legislation in the European Union that mandates corporate diversity disclosures, and we analyze how 30 large German companies disclose diversity in their annual reports. Drawing on institutional theory and Oliver’s (1991) seminal work on strategic responses to institutional processes, our analysis reveals four mandatory reporting responses: dismissal, concealment, imitation, and transcendence. Overall, our findings show that although diversity has been institutionalized into organizational environments by the European Union through legislative action, organizational responses vary, from resistance to passive conformity or proactive compliance. With these findings, our study adds to the emergent diversity accounting literature, and we conclude by highlighting implications of our work for policymakers, managers, and researchers. Data Availability: Data are available from the public sources cited in the text.

AB - Diversity has emerged as a topic of increasing organizational and legislative relevance. Despite forming a burgeoning research field in accounting, little is known about how organizations respond to diversity disclosure legislation. In this paper, we study the introduction of diversity disclosure legislation in the European Union that mandates corporate diversity disclosures, and we analyze how 30 large German companies disclose diversity in their annual reports. Drawing on institutional theory and Oliver’s (1991) seminal work on strategic responses to institutional processes, our analysis reveals four mandatory reporting responses: dismissal, concealment, imitation, and transcendence. Overall, our findings show that although diversity has been institutionalized into organizational environments by the European Union through legislative action, organizational responses vary, from resistance to passive conformity or proactive compliance. With these findings, our study adds to the emergent diversity accounting literature, and we conclude by highlighting implications of our work for policymakers, managers, and researchers. Data Availability: Data are available from the public sources cited in the text.

KW - compliance

KW - diversity

KW - diversity disclosure legislation

KW - institutional theory

KW - nonfinancial reporting

KW - resistance

U2 - 10.2308/HORIZONS-2022-083

DO - 10.2308/HORIZONS-2022-083

M3 - Journal article

AN - SCOPUS:85188335066

SN - 0888-7993

VL - 38

SP - 123

EP - 138

JO - Accounting Horizons

JF - Accounting Horizons

IS - 1

ER -