As the great resignation rages on and businesses struggle to retain top talent, shareholders argue that more transparency about diversity and inclusion data will help companies drive need advancements in social and racial equity. Some 65 shareholder proposals this year seek information on decent work, and another four dozen ask for workforce diversity data. Companies with boards reluctant to share insights on workforce recruitment, retention, and promotion by gender, race, and ethnicity are missing an opportunity. More transparency could build trust with investors and current employees and identify gaps and needed systemic fixes.

Right now, shareholders evince a lack of trust and so do employees. A recent survey by All Voices finds that only 38 percent of human resource professionals “are highly confident they’re hearing about policy issues or employee discomfort” and sees a need for better systems and transparency; it highlights a correlation between poor workplace practices and low retention.

A growing number of employees would rather take a chance in the post-Covid-19 labor market than remain in unfulfilling roles or experience toxic work culture, as shown by the 4.5 million people who quit in November 2021.

Companies are reaffirming commitments to diversity, equity, and inclusion (DEI) in the workplace but not sharing data investors want. As You Sow found that 56 percent of Russell 1000 companies made statements after George Floyd’s murder, but less than 20 percent of these companies have released their EEO-1 data, a government-mandated but non-public report on workplace composition. Far fewer than 20 percent have released more expansive inclusion data on matters such as employee recruitment, retention, and promotion. This dearth of transparency persists even after the unrest of 2020, renewed and widespread cultural commitments to social justice, and increasingly successful stakeholder activism in 2021.

“It’s hard to find a company that hasn’t made statements about the importance of diversity, equity, and inclusion (DEI) to their success and the level of import within their company,” said Meredith Benton of Whistle Stop Capital. “However, insufficient data exist to assess or benchmark companies' workplace equity programs.”

CEOs must support more disclosure to create accountability and improve social and racial equity in the workplace. More than 58 percent of leaders say they need to communicate better with employees on DEI goals and progress. Transparency about workforce deficiencies and gaps can show a genuine recommitment to diversity programs. Business leaders should prioritize this new normal and also develop plans to include shareholders in more defined and helpful roles.

Investors will better see how companies can move successfully out of the pandemic and the challenges it laid bare if the companies release diversity and retention data. This also will improve employee loyalty, diversity, and culture, underscoring the value and importance of a diverse and inclusive workforce for employees, customers, and other stakeholders.

Stephanie Rivers
Master of Public Affairs Candidate at UC Berkeley; Consultant, Whistle Stop Capital