The SEC approved Nasdaq’s proposal that would require companies listed on the exchange to hit certain diversity minimums for their boards.
I read this on one of the countless newsletters I read every morning. It seems like a much bigger deal than a few articles.
The target would be to have at least one woman director and a director who self-identifies as a racial minority or lesbian, gay, bisexual, transgender, or queer. Companies would also be required to disclose diversity statistics about their boards. Keep in mind that 75% of the listed companies would not have met this proposal. Think about that.
Affirmative action was a beginning. If anyone knows of any data around the impact of affirmative action, feel free to send it my way. Affirmative action is a policy that aims to increase opportunities in the workplace or education to underrepresented parts of society by taking into account an individual’s color, race, sex, religion, or national origin.
We search for multiple ways to force diversity. Unfortunately, I need to use the word “force.” We can stop buying from companies without diverse boards, but that impact has clearly not been felt. Some VC firms are wise enough to push for this before a company is going for its IPO. The narrative has changed, but the laws haven’t.
Other countries have made it a law that boards must have a certain percentage of women on their boards. It forces boards to look outside their checklist of what the board member should be. That is how we begin to think differently and see other sides of conversations.
I believe this approved proposal is game-changing.