Addressing the Diversity Paradox: A Resource‐Based View of DEI Best Practices

This paper explores the benefits and challenges of Diversity, Equity and Inclusion practices, with an emphasis on their relevance to the UN's Sustainable Development Goals (#5 ‘gender equality’ and #8 ‘inclusive economic growth’). While effective DEI practices are linked to desirable societal, organisational and individual outcomes (e.g., sustainable social, environmental and economic development), there exists a ‘diversity paradox’, where the implementation of DEI policies yields mixed or contradictory results. Based on the content analysis of official reports and websites published by the top 20 firms in Fair360's 2024 DEI rankings, this study identifies 26 resources and four key capabilities that underpin DEI best practices that potentially avoid the diversity paradox. This paper discusses how these capabilities contribute to achieving SDGs #5 and #8 and concludes with recommendations for future research (including the need for broader data sources, quantitative studies and context‐specific analyses to better understand and enhance DEI practices).