Ford Foundation/Just Capital grant awarded

Alex Edmans, Professor of Finance at London Business School, has been awarded a Ford Foundation/JUST Capital grant to further understanding of human capital management.

Professor Edmans and his co-investigators, Professor Caroline Flammer and Dr. Simon Glossner, will study the link between Diversity, Equity, and Inclusion (DEI) and firm performance, as well as what factors contribute to high-DEI workplaces.

Previous scholarly work on DEI has used superficial measures of diversity, such as demographic data, which do not capture equity, inclusion, nor non-demographic aspects of diversity.

Professor Edmans’ new project aims to overcome these issues by using confidential data obtained through an agreement with Great Place to Work, an organisation that compiles the Best Workplace lists. In particular, while only companies’ overall list inclusion is announced publicly, Professor Edmans and his co-authors have obtained data on the sub-questions that relate to employee perceptions of DEI.

The research builds on earlier, significant work by Professor Edmans, published in the Journal of Financial Economics and Academy of Management Perspectives, using data from Great Place to Work’s ‘100 Best Companies to Work for in America’ list. These papers showed the long-term stock returns of these companies significantly outperformed those of their peers. The research was among the earliest to demonstrate the ability of sustainable investing strategies to lead to outperformance.