HomeNewsBusinessNasdaq wants more diversity in company boardrooms

Nasdaq wants more diversity in company boardrooms

LezMeetOnline Lesbian Online Dating
Nasdaq

Nasdaq wants more diversity in company boardrooms

Nasdaq is pushing for more diversity in company boardrooms by adopting a new rule that would require all listed companies to have directors that are female, underrepresented minority, or LGBTQ.

In addition, the US exchange wants the more than 3,000 companies listed with them to publicly disclose consistent and transparent diversity statistics with regard to their board of directors.

Those companies that do not comply could be delisted or kicked off the exchange. The proposal still needs the approval of the US Securities and Exchange Commission (SEC).

Nasdaq’s push for diversity

As justification for this proposal, Nasdaq presented last week an analysis by the Carlyle Group investment company that linked diverse boards with better financial performance and corporate governance.

The proposal’s goal is supposedly to provide stakeholders a better understanding of the company’s current board composition.

It would also enhance investor confidence that all listed companies are considering diversity vis-a-vis selecting directors for their board.

“Nasdaq’s purpose is to champion inclusive growth and prosperity to power stronger economies,” said Adena Friedman, Nasdaq President and CEO.

Meanwhile, Nelson Griggs, President of Nasdaq Stock Exchange, said: “Corporate diversity, at all levels, opens up a clear path to innovation and growth.”

Reactions to Nasdaq’s diversity proposal

While the SEC declined to comment, its Chairman, Jay Clayton, said: “We welcome dialogue on how to improve diversity, inclusion, and opportunity in the financial services sector and our economy more broadly.”

Meanwhile, the US Chamber of Commerce’s Tom Quaadman, executive vice president at the chamber’s center for capital markets competitiveness, called it a “business led solution to resolving diversity issues on corporate boards.”

“By pushing its listed companies to address racial and gender equity in corporate boards, Nasdaq is heeding the call of the moment,” said Anthony Romero, executive director of the American Civil Liberties Union

However, the conservative group Judicial Watch has said they would oppose the Nasdaq rule.

The group’s president, Tom Fitton, declared that, “It is disturbing and may violate the law for Nasdaq to seemingly require a discriminatory quota system for race and gender.”

State of boardroom population

According to executive-data firm Equilar, women occupy 23.1 percent of board seats in companies included the Russell 3000, a broad index that includes most of the US stock market.

A study in September by ISS ESG, the investment arm of Institutional Shareholder Services, reported that only 16.8% of 33,000 directors at large cap companies belong to a minority group, and only 27.4% are women.

California is the first state to require all publicly held companies that are headquartered with them to have at least one female director by the end of 2019.

Illinois was supposed to pass a similar bill by state Rep. Emanuel “Chris” Welch requiring companies to have at least one female director and one African-American director on the board by the end of 2020.

However, the bill received opposition from manufacturers, who said this could mean kicking out someone off the board who was not a woman or African-American.

The bill later became law without the diversity mandate, requiring companies only to report on their boards’ racial and gender breakdowns.

Share With:
No Comments

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.