Transparency about lagging diversity numbers signals genuine progress

Key Question Being Explored in This Insight:

Does transparency about lagging diversity numbers, despite being counterintuitive to conventional wisdom, actually enhance perceptions of commitment, progress, and trustworthiness in organizations?

View the page of: Evan P. Apfelbaum

Institution: Boston University

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Does transparency about lagging diversity numbers, despite being counterintuitive to conventional wisdom, actually enhance perceptions of commitment, progress, and trustworthiness in organizations?

Image courtesy of interviewee. January 23, 2025

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This video discusses the response of companies to the racial reckoning that emerged after George Floyd's death, focusing on their commitments to increase diversity and inclusion in the workforce. It highlights that while many corporations expressed intentions to improve diversity, few have publicly disclosed actual metrics about their workforce demographics. The author argues that companies possess this data, as they are legally required to report it to the EEOC, suggesting that the lack of transparency might stem from strategic calculations about the potential repercussions of disclosure.

The discussion emphasizes that there is a general mistrust among stakeholders regarding organizations' sincerity in their diversity efforts. Transparency is proposed as a means to rebuild trust, encouraging companies to openly report their successes and challenges in achieving diversity goals. The author contends that admitting struggles can enhance a company’s reputation, as it demonstrates accountability and a commitment to improvement rather than hiding failures.

Additionally, the text touches on the political tensions surrounding diversity initiatives, suggesting that a clearer and more specific dialogue about diversity and inclusion can help mitigate misunderstandings and resistance. By being transparent about diversity-related efforts and outcomes, organizations may foster more constructive conversations and reduce polarization on the topic. Overall, the text advocates for systematic accountability and ongoing feedback mechanisms in diversity programs.

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Here are five key points from the video:

1. **Lack of Transparency in Diversity Commitments**: Many large companies made verbal commitments to increase diversity in their workforce following the racial reckoning after George Floyd's death, yet failed to publicly disclose their diversity data, despite being legally required to collect it. This raises questions about their intentions and the effectiveness of their commitments.

2. **Impact of Transparency on Reputation**: When companies do not succeed in their diversity initiatives, transparency about their struggles can enhance their reputation more than silence. Acknowledging setbacks openly can counteract distrust and demonstrate genuine efforts, whereas hiding failures can be perceived negatively.

3. **Public Trust Issues**: There is widespread skepticism regarding companies' commitments to diversity and inclusion. Transparency can mitigate this mistrust by providing concrete data and specific updates on progress, allowing organizations to clarify their intentions and actions.

4. **Importance of Accountability and Feedback**: Stakeholders expect companies to provide feedback on their diversity initiatives and to demonstrate accountability. This feedback loop is essential in assessing whether diversity efforts are effective and informs future policy and practice adjustments.

5. **Complex Perspectives on Diversity**: The conversation around diversity is often polarized across political lines, with fears of unfair practices or a lack of meritocracy emerging. It is crucial to articulate what diversity means, how it is integrated into hiring practices, and to dispel misconceptions about qualifications to bridge gaps in understanding across diverse viewpoints.

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Here are some key quotes extracted from the video you :

1. **On Corporate Commitment to Diversity**:
- "Many big private companies were saying how they really cared how they were gonna increase numbers of women, of racial minorities in their workforce..."

2. **On Transparency in Diversity Metrics**:
- "Part of this came through...why don't you guys...back up these commitments by showing us how diverse your workforces actually are and publicly disclose these numbers."

3. **On the existing data**:
- "Turns out that's not the case. Big companies are required in the United States by law to collect basic headcount, gender, race by job category, and they report it to the EEOC."

4. **On Public Trust and Transparency**:
- "People don't believe what organizations say what they really mean...a common thread is that people don't fully trust what others are going to do in various situations."

5. **On the importance of transparency**:
- "Transparency is a very important currency in this diversity area...to cut through that in a way that I think can be very constructive."

6. **On Acknowledging Struggles**:
- "When you openly, transparently acknowledge that...it's really hard to say, okay, well this is BS because why would you openly acknowledge the fact that you've struggled to do something here?"

7. **On the perceptions of companies**:
- "...being transparent about struggles has a more positive impact on your reputation as a company than silence."

8. **On the disconnect in expectations**:
- "I think accountability is important. I think that people expect some sort of feedback about whether things worked or not, and that is true in the diversity space."

9. **On addressing concerns around diversity**:
- "Part of the reason that theme is able to survive is because we're staying at this high vague level and people's minds go to the absolute worst places."

10. **On hiring and qualification**:
- "...it's important to think about, well, where does that break down across political lines? Are we gonna now add extra points and bring in people who are not qualified?"

These quotes encapsulate the main themes of corporate transparency, accountability, the importance of acknowledging struggles in diversity efforts, and the complex dynamics surrounding public perception of these issues.

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It feels like ages ago now.

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But, you know, think of post George Floyd, you know,

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the United States, the world was going

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through this racial reckoning,

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and what many big private companies were doing in response

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to that were, they were saying a lot, they were saying how

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they really cared how they were gonna increase numbers

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of women, of racial minorities in their workforce

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among a, a number of other things.

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There really wasn't any mechanism

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to see if they were actually doing that

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or to see how diverse they were.

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Um, and so, part of this came through

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and I think, you know, we've talked about the, you know,

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Scott Stringer, who was the comptroller

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of New York City at the time, kind of made this comment,

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well, why don't you guys speaking

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to the companies back up these commitments by showing us

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how diverse your workforces actually are

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and publicly disclose these numbers.

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I thought that was a really interesting idea.

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And I also knew at the time that the vast majority

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of companies, despite their words,

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had not released any numbers publicly.

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One explanation is that the companies don't actually have

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these data, and so they can't really release it.

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Turns out that's not the case.

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Big companies, are required in the United States by law

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to collect basic, you know, headcount, gender,

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race by job category, and they report it to the EEOC.

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And so we knew they had the data.

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It was really what seemed to be more

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of a strategic calculation about whether

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or not to publicly disclose that or not.

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And so we kind of knew that most companies had these data

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and that the vast majority weren't disclosing.

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And so the curiosity was, well, why aren't they doing this?

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And is the intuition that releasing these data

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would be a problem for them?

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The way I look at this is this is an area in which there is

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really deep levels of mistrust on all sides.

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People don't believe what organizations say

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what they really mean.

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Um, you know, some people don't believe that diversity,

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inclusion, equality issues are actually fair,

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on wherever you sit on the political spectrum.

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This is a hot issue,

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but I would actually say that a common thread is that people

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don't fully trust what others are going to do

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or say, or what they actually intend,

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in various situations.

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And so transparency is a way to sort

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of cut through that in a way

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that I think can be very constructive.

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Because when you have people who are reacting

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to the word diversity

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and their minds are going to very extreme places,

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that's a problematic state to be in.

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But when you can be very transparent about specifically,

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Hey, this is what we're doing, or this is

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how much we've increased or haven't increased our numbers

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based on what we said, you narrow the scope of

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disconnect to talk about something

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very concrete and specific.

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And I think that in this case,

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but also more generally,

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transparency is a very important currency in

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this diversity area.

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And is that because it, it brings accountability,

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Evan, why do you think that's the case?

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Why is it so important?

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I think it's important because when you are transparent

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about something that is

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or isn't working, you remove a lot

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of the suspicious other ulterior motives

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that people think might be happening here,

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and you ground it in something very factual.

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And I think in the case of this paper, when

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things are not going well, when your company has said,

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we really care about diversity,

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and a year later you learn that despite all these efforts

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to increase the number of, let's say female managers

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or racial minorities,

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in corporate positions, you haven't done it.

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And you openly, transparently acknowledge that.

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Now it's really hard to say, okay, well this is BS

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because why would you openly acknowledge the fact

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that you've struggled to do something here?

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It leaves people observing this

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with few potential explanations except, well,

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I guess they actually meant to do this

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and really tried to and just failed.

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I think the transparency can cut through a lot

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of these other attributions and,

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and guesses we have about why things are happening.

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Imagine you have a company that says,

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we are gonna work really hard to increase racial

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and ethnic minority diversity.

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Okay, you have two ways that this can go.

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In reality, they either succeed in doing that

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or they don't succeed in doing that.

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What we find in short is when the companies are successful

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in delivering on their commitments,

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it doesn't really matter if they're transparent or not.

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It's not, doesn't have a huge difference.

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And people like companies that do

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what they said they were going to do in general,

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when companies don't deliver on what they've promised to do

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or strive to do, so they say, we're gonna increase,

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but we've really, our numbers are flat a year later.

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Now, it turns out that transparency matters

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and in a way that is very different from common

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sense intuition.

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And the common sense intuition would be, man,

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we didn't increase into diversity.

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We better brush this under the rug

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and start talking about other things.

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Let's introduce a distraction or gloss it over

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because this is gonna really hurt our reputation.

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It turns out that in that situation,

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actually being transparent about struggles is,

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has a more positive impact on your reputation

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as a company than silence.

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And the reason has to do again, with

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understanding that this is a place

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where people don't necessarily trust when you said in the

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first place, we really care about diversity

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and we're gonna increase, et cetera.

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So when you say, Hey, we tried, we did X, Y, and Z,

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but unfortunately we haven't seen a change

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and we're working through that

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and we're gonna try to go back to the drawing board

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and figure it out, pump, we find

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that those companies are perceived

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as actually having made more progress than the companies

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who are mom and haven't said a word.

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Because part of progress is acknowledging

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and being open about where you currently stand.

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And, and I think this applies to many different areas.

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If I've told you that I'm gonna do something a year later,

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it feels satisfying to hear a,

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a feedback a year later about, Hey, you know, I've done X,

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Y, and Z, but I haven't been able to do these three things

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and here's what we're gonna work on in the future.

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I think it cuts through the mistrust,

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and I think that is really endemic

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and problematic in this space.

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Anytime you want to change something in an organization

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or in a government body,

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you need some monitoring mechanism, right?

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How do we know if it's working or not, right?

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And so diversity is kind of one of these places where,

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we could just say we wanna increase it

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and then the, the conversation's over

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and we don't really have to talk about it anymore.

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I think accountability is important.

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I think that people expect some sort of

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feedback about whether things worked or not,

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and that is true in the diversity space.

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And so when we think about future policies and programs

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and efforts, I think a mechanism to say what worked

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and what didn't and how we are then changing our practices

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as a result should be standard practice.

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And I think that will help people on all sides

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of the political spectrum understand specifically

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what was done, what changed.

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And I think it actually has a potential

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to reduce polarization to some degree, on these issues.

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It's a great question and I I spent a lot

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of time thinking about this, so I, so I think, part of

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what happens is DEI has become code

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for, unfair hiring practices,

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for example, or lack of meritocracy,

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not getting the best people.

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And this is something that I research,

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on my research team, we have a number

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of projects looking at,

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and part of the reason that,

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theme is able to survive is

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because we're staying at this high vague level

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of talking about a term

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and people's minds go to the absolute worst places, right?

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Which social media can further perpetuate

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by talking very specifically about what it is

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that we mean about diversity, what we are

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and what we are not doing in terms of introducing it

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as a factor in hiring.

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So for example, the world is becoming more global.

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That's not a controversial statement.

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And we do need people who can represent perspectives from

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around the world in big global organizations.

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I don't think that's a con controversial statement either.

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So diversity is important,

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but it's important to think about, well, where does

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that break down across political lines?

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And I think, for example, one place it breaks down

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is when you say,

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we're gonna focus on diversity in selecting people

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to organizations or to universities.

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People's minds go to, well, is it gonna be unfair?

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Are we gonna now add extra points

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and bring in people who are not qualified?

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Well, I think greater transparency into actually what's

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happening here can make people relax and,

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and I think everyone needs somebody hired

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or in a position who is qualified.

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I don't think we're ever talking about people

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who are not qualified.

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And in fact, it might be that the final decisions of

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who gets hired or who gets selected should be blind.

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But it's not to say

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that all the processes looking up doesn't mean

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that we shouldn't be looking in new places for our talent.

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It doesn't mean that we shouldn't be considering,

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bringing in people who look like our customers

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or the marketplaces we're operating in.

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And so by being more specific

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and transparent about what is

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and what is not happening, I think we have a better chance

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to, to bring people together.

Quick Answers

Demand for Transparency in Corporate Diversity Efforts

00:00:00 - It feels like ages ago now. But, you know, think of post George Floyd, you know, the United States, the world was going through this racial reckoning, and what many big private companies were doing in response to that were, they were saying a lot, they were saying how they really cared how they were gonna increase numbers of women, of racial minorities in their workforce among a, a number of other things. There really wasn't any mechanism

00:00:33 - or to see how diverse they were. and so, part of this came through and I think, you know, we've talked about the, you know, Scott Stringer, who was the comptroller of New York City at the time, kind of made this comment, well, why don't you guys speaking to the companies back up these commitments by showing us how diverse your workforces actually are and publicly disclose these numbers. I thought that was a really interesting idea.

00:01:04 - of companies, despite their words, had not released any numbers publicly. One explanation is that the companies don't actually have these data, and so they can't really release it. Turns out that's not the case. Big companies, are required in the United States by law to collect basic, you know, headcount, gender, race by job category, and they report it to the EEOC. And so we knew they had the data.

Transparency and Trust in Diversity Discourse

00:01:35 - of a strategic calculation about whether or not to publicly disclose that or not. And so we kind of knew that most companies had these data and that the vast majority weren't disclosing. And so the curiosity was, well, why aren't they doing this? And is the intuition that releasing these data would be a problem for them? The way I look at this is this is an area in which there is

00:02:07 - People don't believe what organizations say what they really mean. you know, some people don't believe that diversity, inclusion, equality issues are actually fair, on wherever you sit on the political spectrum. This is a hot issue, but I would actually say that a common thread is that people don't fully trust what others are going to do

00:02:37 - in various situations. And so transparency is a way to sort of cut through that in a way that I think can be very constructive. Because when you have people who are reacting to the word diversity and their minds are going to very extreme places, that's a problematic state to be in. But when you can be very transparent about specifically, Hey, this is what we're doing, or this is

Transparency as Accountability in Diversity Efforts

00:03:06 - based on what we said, you narrow the scope of disconnect to talk about something very concrete and specific. And I think that in this case, but also more generally, transparency is a very important currency in this diversity area. And is that because it, it brings accountability, Evan, why do you think that's the case? Why is it so important? I think it's important because when you are transparent about something that is

00:03:40 - of the suspicious other ulterior motives that people think might be happening here, and you ground it in something very factual. And I think in the case of this paper, when things are not going well, when your company has said, we really care about diversity, and a year later you learn that despite all these efforts to increase the number of, let's say female managers

00:04:10 - in corporate positions, you haven't done it. And you openly, transparently acknowledge that. Now it's really hard to say, okay, well this is BS because why would you openly acknowledge the fact that you've struggled to do something here? It leaves people observing this with few potential explanations except, well, I guess they actually meant to do this and really tried to and just failed. I think the transparency can cut through a lot

Transparency in Diversity: A Path to Corporate Trust

00:04:42 - and guesses we have about why things are happening. Imagine you have a company that says, we are gonna work really hard to increase racial and ethnic minority diversity. Okay, you have two ways that this can go. In reality, they either succeed in doing that or they don't succeed in doing that. What we find in short is when the companies are successful in delivering on their commitments, it doesn't really matter if they're transparent or not. It's not, doesn't have a huge difference.

00:05:14 - what they said they were going to do in general, when companies don't deliver on what they've promised to do or strive to do, so they say, we're gonna increase, but we've really, our numbers are flat a year later. Now, it turns out that transparency matters and in a way that is very different from common sense intuition. And the common sense intuition would be, man, we didn't increase into diversity. We better brush this under the rug

00:05:43 - Let's introduce a distraction or gloss it over because this is gonna really hurt our reputation. It turns out that in that situation, actually being transparent about struggles is, has a more positive impact on your reputation as a company than silence. And the reason has to do again, with understanding that this is a place where people don't necessarily trust when you said in the first place, we really care about diversity

Transparency and Accountability in Corporate Diversity Efforts

00:06:14 - So when you say, Hey, we tried, we did X, Y, and Z, but unfortunately we haven't seen a change and we're working through that and we're gonna try to go back to the drawing board and figure it out, pump, we find that those companies are perceived as actually having made more progress than the companies who are mom and haven't said a word. Because part of progress is acknowledging and being open about where you currently stand.

00:06:47 - If I've told you that I'm gonna do something a year later, it feels satisfying to hear a, a feedback a year later about, Hey, you know, I've done X, Y, and Z, but I haven't been able to do these three things and here's what we're gonna work on in the future. I think it cuts through the mistrust, and I think that is really endemic and problematic in this space. Anytime you want to change something in an organization or in a government body,

00:07:18 - How do we know if it's working or not, right? And so diversity is kind of one of these places where, we could just say we wanna increase it and then the, the conversation's over and we don't really have to talk about it anymore. I think accountability is important. I think that people expect some sort of feedback about whether things worked or not, and that is true in the diversity space. And so when we think about future policies and programs

Enhancing Transparency and Accountability in Diversity Practices

00:07:51 - and what didn't and how we are then changing our practices as a result should be standard practice. And I think that will help people on all sides of the political spectrum understand specifically what was done, what changed. And I think it actually has a potential to reduce polarization to some degree, on these issues. It's a great question and I I spent a lot of time thinking about this, so I, so I think, part of

00:08:24 - for, unfair hiring practices, for example, or lack of meritocracy, not getting the best people. And this is something that I research, on my research team, we have a number of projects looking at, and part of the reason that, theme is able to survive is because we're staying at this high vague level

00:08:52 - and people's minds go to the absolute worst places, right? Which social media can further perpetuate by talking very specifically about what it is that we mean about diversity, what we are and what we are not doing in terms of introducing it as a factor in hiring. So for example, the world is becoming more global. That's not a controversial statement. And we do need people who can represent perspectives from

Bridging Political Divides Through Diversity Transparency

00:09:24 - I don't think that's a con controversial statement either. So diversity is important, but it's important to think about, well, where does that break down across political lines? And I think, for example, one place it breaks down is when you say, we're gonna focus on diversity in selecting people to organizations or to universities. People's minds go to, well, is it gonna be unfair? Are we gonna now add extra points and bring in people who are not qualified?

00:09:55 - happening here can make people relax and, and I think everyone needs somebody hired or in a position who is qualified. I don't think we're ever talking about people who are not qualified. And in fact, it might be that the final decisions of who gets hired or who gets selected should be blind. But it's not to say that all the processes looking up doesn't mean that we shouldn't be looking in new places for our talent.

00:10:40 - bringing in people who look like our customers or the marketplaces we're operating in. And so by being more specific and transparent about what is and what is not happening, I think we have a better chance to, to bring people together.

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