SEC Approves Nasdaq Board of Directors’ Diversity Proposal
“These rules will allow investors to better understand the approach of Nasdaq-listed companies to board diversity, while ensuring that these companies have the flexibility to make decisions that best serve their shareholders,” said SEC Chairman Gary Gensler in a statement. “These rules reflect investor calls for greater transparency about who runs public companies, and a wide range of commentators have supported the proposed board diversity disclosure rule.”
SEC Commissioner Elad L. Roisman said in a statement he supported the Nasdaq target but not its proposal. “I do not think that the committee has fulfilled its obligations to find that this proposal, which has delisting implications for companies, meets the legal standards that we are required to apply in evaluating the rules proposed by the self-regulatory bodies “Like scholarships, Mr. Roisman said.
Sen. Pat Toomey, R-Pa., A senior member of the Senate Banking Committee, also challenged the SEC’s ruling in a statement. “Corporate boards, like all organizations, can benefit from a variety of perspectives, but the Nasdaq’s single quota misses the mark,” Toomey said. “By defining diversity by race, gender and sexual orientation, the Nasdaq mandate will inevitably push companies to subordinate crucial factors such as knowledge, experience and expertise when selecting board members. “
Looking at the decision differently, Commissioners Allison Herren Lee and Caroline A. Crenshaw called the SEC’s decision a positive first step for investors.
“The Nasdaq proposal is expected to improve the quality of information available to investors to make investment and voting decisions by providing consistent and comparable measures of diversity,” the commissioners said in a statement. “Nonetheless, there is still work to be done to improve both diversity and transparency in public companies and in our capital markets in general.”