"The US is lagging behind the rest of the world on corporate diversity and inclusion disclosure based on a new analysis of financial reporting, by risk analytics company Datamaran. The company used a natural language processing algorithm to gauge how companies are prioritising the issue."
These findings should be a “red flag” for investors, said Datamaran’s chief executive Marjella Lecourt-Alma. “Transparency, or lack thereof, on important issues like diversity and inclusion reflects a company’s corporate governance approach, culture and risk mindset,” she said.
How Materiality Impacts Reputation
Several global companies have been shocked by scandals and crises in recent years.
These crises raise questions about why various governance, environmental and safety risks hadn’t been foreseen.
The analysis shows that Boeing, Nissan and Volkswagen had failed to report material information in the years leading up to the scandals. Failing to identify key material issues can also lead to adverse publicity, the withdrawal of investors and a drop in share prices.
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