Abstract
This research evaluates the impact on firm value of an initial hiring of a Chief Diversity Officer (CDO) by conducting an event study. This study examines a 33-year period (from 1990 through 2022) using press release data obtained from the Nexis Uni database. The event study methodology incorporates stock market price reactions to the announcement using the Center for Research in Security Prices (CRSP) database through the Wharton Research Data Services (WRDS) databases. The results find the short-term announcements of a CDO hiring significantly impact firm value, and they trend significantly positive on average. Both the short term announcement reaction and the longer term one-month effect is positive and statistically significant with several sophisticated event models. This study provides empirical evidence to support the proposition that a corporation’s embracing of diversity, as demonstrated by the initial hiring of a Chief Diversity Officer, significantly increases shareholder value.