Legal and Market Initiatives to Increase Diversity in Corporations—A Cross-Jurisdictional Analysis

This Article will critically examine various legal and market initiatives to increase diversity in corporations, with the aim of assessing their effectiveness. The initiatives explored in this Article include quota laws in Europe (including recent amendments in France and Germany which introduce quotas for executive director positions) and California; disclosure laws in the U.S., Nasdaq, and U.K.; and initiatives by institutional investors. The main argument this Article makes is that both quotas and quantitative disclosures do not provide the right incentives for corporations to make genuine efforts to improve diversity. The alternative this Article proposes is not to simply leave matters as is, but rather for all those involved in the diversity project—legislators, investors, and the general public—to steer the discourse towards long-term and sustained change.

One way to push corporations in this direction is to encourage qualitative disclosures which will incentivise innovative and firm-specific solutions.