Document Type Working Paper
Diversity initiatives are commonplace in today’s corporate America. Large and successful firms frequently tout their commitments to diversity, sometimes appointing women and racial minorities to highly visible posts, including seats on their boards of directors. Why would a profit-minded firm engage in such behavior? One frequently voiced explanation is that by creating such diversity, firms send out a positive signal about their attributes: a firm’s willingness to expend resources on diversity shows its commitment to workplace fairness and equality, which makes it more attractive to potential employees, customers and financiers. This claim has considerable surface appeal not only as an explanatory thesis, but as a rationale that conveniently bridges the normative gap between corporate self interest and the promotion of social justice. In this article, we raise some difficulties with the theory of diversity-as-signal in terms of both its explanatory adequacy and its normative implications.