Leading by Example: External Environment’s Impact on DEI Messaging

By: Emma Edoga, Chad Peddie, and Keli P. Wilson, and DiversIQ

In Parts I and II, we explored how S&P 100 companies use their websites to communicate DEI commitments through various sections and the messaging of DEI philosophy. Besides effective communication, DEI programs now face legal and political challenges. Organizations need adaptive approaches to ensure DEI efforts are effective and legally sound. In Part III, we examine how the placement and focus of DEI messaging influence diversity outcomes and reflect the organization’s commitment to inclusion. Analyzing these strategies helps companies understand how their DEI efforts resonate internally and externally, shaping culture and leadership diversity. 

Relationships With Organizational Outcomes 

As organizations strengthen their DEI efforts, it’s important to consider the impact of DEI messaging not only on external perception but also on how those messages relate to internal organizational representation. Diversity in organizations can enhance creativity, improve problem-solving, and lead to better decision-making by bringing together varied perspectives and experiences. Research shows that diverse teams are more innovative and effective, driving overall organizational performance.¹ By aligning DEI messaging with organizational metrics, companies can demonstrate that their DEI initiatives are not merely symbolic but are driving real, measurable change. Outcomes of interest assessed in the current review focused on: 

• Board Representation of Women and People of Color (PoC): The inclusion of women and individuals from racial and ethnic minority backgrounds on an organization's board of directors.
• Senior Leadership Representation by Women and People of Color: The presence of women and individuals from racial and ethnic minority backgrounds in senior leadership positions within an organization. 
• General Organizational Leadership by Women and People of Color: The representation and involvement of women and individuals from racial and ethnic minority backgrounds in leadership positions within an organization.  
• Overall Employee Representation: The presence of a diverse workforce across all levels of an organization, encompassing various dimensions of diversity, including race/ethnicity and gender.  

By understanding the relationship between DEI messaging and broader outcomes, organizations can build a sustainable, inclusive culture with relevant metrics. Tailoring DEI communication to specific needs is crucial. Emphasizing DEI in Career Search sections can attract diverse candidates, enhancing hiring efforts. Highlighting DEI progress on About Us pages or Board communications can boost public trust and leadership diversity. 

Findings based on Organizational Messaging 

In general, organizations without a dedicated DEI page tend to experience substantially lower or less favorable DEI outcomes. We chose to review this further with the S&P 100 sample. Similar to Parts I and II of this series, we used the DiversIQ platform to access publicly reported data. This sample represents 40,983,827 employees across industries including technology, finance, healthcare, and consumer goods, capturing a diverse range of corporate structures and workforce demographics. By focusing on the S&P 100, this analysis highlights trends among some of the most influential companies, providing a snapshot of DEI representation practices across sectors that drive both economic impact and innovation. 

Data shows that across several metrics, such as board representation and leadership positions, the presence of a DEI page correlates with significantly better organizational representation at employee, leader, and board director levels. For example, in categories like Women in Leadership and Women in Senior Leadership, representation of underrepresented individuals is noticeably higher in organizations with a DEI page, showing a commitment to diversity and equity efforts. This suggests that the visibility and focus provided by a DEI page play a critical role in fostering more inclusive and equitable environments. 

Graph 1: S&P 100 Representation for Women based on DEI Page 

Graph 2: S&P 100 Representation for People of Color based on DEI Page 

Women and People of Color in Board Positions based on DEI Messaging Location 

Further, we analyzed the S&P 100 data on women and people of color in board positions based on the location of DEI messaging. These findings show that companies featuring DEI content on the About Us and Homepage sections of their websites tend to report significantly higher board representation for both women and people of color. This highlights the importance of strategically positioning DEI messaging to help drive leadership diversity. Board data was available from six organizations that prominently featured DEI messaging on their homepage and introductory sections. Although these six represent a smaller segment than the other categories, they still have a substantial reach, collectively representing 629,245 employees. Comparatively, the About Us group represents 535,700 employees. This data reinforces that, despite being fewer in number, these organizations have a significant impact and offer valuable insights into the relationship between prominent DEI messaging and board diversity outcomes. 

Table 1: DEI Message Strategy and Organizational Board Diversity 

Senior Leadership Representation by Gender and People of Color 

Data on senior leadership indicates that companies highlighting DEI messaging in ESG reports and in their About Us section exhibit higher diversity among women in senior leadership roles. Conversely, DEI messaging on the Homepage and About Us sections correlate with stronger representation of people of color in senior leadership positions.  

Organizations that only include a brief mention of DEI generally show the least favorable representation of both women and people of color. In fact, there is a 9.6 percentage point difference for women and a 14.4 percentage point difference for people of color between companies with prominent DEI messaging and those with minimal DEI references.  

Table 2: DEI Message Strategy and Senior Leadership² 

General Leadership Representation by Gender and People of Color 

General leadership representation shows that companies with diverse leadership, by race/ethnicity and gender, tend to be more likely to highlight their DEI commitment on their Homepage and About Us sections. However, the two organizations that only include brief mentions of diversity have more diverse leadership cohorts. With only two companies, these findings can be unstable and subject to considerable variation. Notably, these two companies represent 336,000 employees, and one is a large, big-box retailer with a substantial front-line workforce, often comprising many people of color in lower, store-level leadership positions, which may contribute to broader representation in overall leadership. 

Table 3: DEI Message Strategy and Overall Leader Representation³ 

Overall Employee Diversity by Gender and People of Color  

Findings on Overall Organizational Diversity by Gender and People of Color show significant differences based on the placement of DEI messaging. The About Us section correlates with the highest representation of women at 41.7%, while companies with only a blurb have the lowest representation of women (34.6%). For ethnic diversity, the Homepage is most closely associated with majority-minority organizations, with an average of 50.8% diverse workforce representation. In contrast, companies using just a blurb tend to have the least diverse workforces in terms of racial and ethnic diversity as well (i.e., 39.4%). This highlights the dynamic relationship between the strategy in DEI messaging placement and the actual composition of organizations and their representation of demographic diversity. 

Table 4: DEI Message Strategy and Overall Employee Representation⁴ 

The initial findings indicate that organizations with a DEI page tend to have more favorable representation and leadership representation for women and people of color. Although DEI messaging could play a role in fostering inclusivity, organizational diversity is impacted by many factors. DEI messaging can be a powerful tool for communicating an organization’s values and goals, potentially attracting diverse talent, enhancing employee engagement, and reinforcing an inclusive culture. Further research is needed to understand how these elements interact to drive meaningful representation and inclusion across different contexts. 

Future Considerations 

Future lines of research should focus on deeper analysis of how DEIA messaging influences key organizational factors beyond leadership representation. These audits assess whether DEI messages align with actual organizational practices and outcomes. Key aspects to consider include: 

1. Authenticity: Auditors assess whether the organization’s DEI messaging reflects genuine efforts or if it’s performative. The consistency between public messaging and internal practices is critical in determining how embedded DEI values are in the company's operations.
2. Accountability: The audit examines if leadership is held accountable for DEI goals and whether the organization communicates clear, measurable objectives. Regular reporting on DEI progress ensures that the company is transparent about its efforts. 
3. Transparency: Civil rights audits evaluate how openly the company shares information about DEI progress, including successes and challenges. Transparent communication helps build trust with both employees and stakeholders. 
4. Clarity of DEI Commitments: The audit reviews whether DEI goals and outcomes are clearly communicated, ensuring that employees and external stakeholders understand the company’s commitment to diversity and how it aligns with overall business goals. 
5. Leadership Engagement: Senior leadership involvement in DEI efforts is a key factor. Auditors will assess how actively leaders support and participate in DEI initiatives, signaling a strong organizational commitment to these goals. 

As future research examines the relationship between DEI messaging and broader organizational outcomes, it should include the examination of outcomes such as compensation, turnover (voluntary and involuntary), new hires, promotions, and the experience of stigmatized communities. Understanding these relationships will offer a more comprehensive view of how DEI strategies impact overall organizational health and employee success, particularly for marginalized groups. This expanded research can help organizations better tailor their DEI communication and practices to ensure equitable outcomes across all levels of the company. 

Conclusion 

In conclusion, the early findings suggest a strong link between the presence of DEI messaging, such as a DEI page, and more favorable outcomes in leadership representation for women and people of color. However, these insights are just the beginning. As the research expands, examining additional factors such as compensation, turnover, new hires, promotions, and the experiences of stigmatized communities will be crucial to understanding the broader impact of DEI communication strategies. This continued analysis will provide deeper insights into how DEI efforts influence not only representation but also critical organizational outcomes, helping to inform more effective diversity and inclusion practices moving forward. 

References

¹ Hunt, V., Layton, D., & Prince, S. (2015). Why diversity matters. McKinsey & Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/why-diversity-matters

² Companies disclosing gender and/or race/ethnicity are included in the average percent of representation.

³ Companies disclosing gender and/or race/ethnicity are included in the average percent of representation.

⁴ Companies disclosing gender and/or race/ethnicity are included in the average percent of representation.