Investigating the Correlation Between Gender Equality, Ethnic Diversity and Financial Materiality

This study examines gender and ethnic pay disparities across listed firms in the USA, UK, and Asia, focusing on the consistent earning advantages men have over women, with gaps of approximately 7%, 3.2%, and 2.8% across the regions respectively, even after adjusting for role specifics, tenure, and education. It also finds significant gender imbalances in career progression, with disparities increasing sharply at senior levels. Specifically, men's representation in senior roles exceeds that of women by 55.7% in the USA, 42.2% in the UK, and 35.6% in Asia. A focused analysis on the USA and UK reveals a complex ethnic disparity where wage gaps close once controlled for equivalent factors, yet stark differences in senior representation persist, highlighting broader systemic inequalities. The study also assesses financial outcomes from investments in companies ranked highly for gender and ethnic diversity, concluding that such investments neither undermine nor boost investor returns. Through exploring both gender and ethnic disparities, the study highlights crucial ongoing challenges in achieving workplace equality and suggests that endorsing diversity aligns with maintaining sound financial performance.