Without racial diversity, you wouldn’t have a “culture of thinking outside the box,” according to a professor of economics at one of America’s most prestigious institutions of higher learning.
Which is why Nasdaq is basically implementing a plan to force companies listed on their stock exchange to go through a ritualistic program of lowering white male participation in senior leadership as a means to improve diversity. Somehow, investors are fretting over a lack of diversity among some of the top publicly traded companies in America, all of whom have market capitalizations of hundreds of billions without significant contributions from non-white members within senior leadership.
But that’s about to change…[Nasdaq Joins Goldman in Corporate Push for More Diverse Boards, Bloomberg, December 1, 2020]:
Nasdaq Inc. plans to require more diversity on boards of directors, the latest push by corporate America to encourage change as regulatory requirements remain unlikely in a gridlocked Washington.
Under its proposed rules, most companies listed on Nasdaq’s U.S. exchange would have to include at least one director who identifies as female and one who identifies as an underrepresented minority or LGBTQ, Nasdaq said in a statement Tuesday. About a quarter of its listed companies currently meet that standard, according to the exchange, which is seeking approval for the plan from the Securities and Exchange Commission.
“Diversity keeps groupthink from happening,” said Scott Yonker, a professor of economics at Cornell University who has studied the impact of board diversity. “You end up with more stable policy and less volatility. You also end up with a culture of thinking outside the box.”
Companies are under increasing pressure from investors and advocates to improve diversity in their top ranks and be more transparent about the makeup of their workforces. In a recent survey, 25 of the biggest companies in the U.S. were willing to make public a copy of a form presented to the Equal Employment Opportunity Commission that gives the racial breakdown of their staff.
Nasdaq’s proposed rule would also require listed companies to disclose diversity statistics for their directors. Foreign companies or smaller firms could satisfy the requirement by including two female directors.
Earlier this year, Goldman Sachs Group Inc. Chief Executive Officer David Solomon said the firm will no longer take a company public in the U.S. and Europe if it lacks a director who is either female or diverse. The bank is Wall Street’s biggest underwriter of initial public offerings in the U.S.
The exchange’s plan intends to give stakeholders a better understanding of board composition and enhance investor confidence, Nasdaq said. As part of the rationale for the new requirements, it presented more than two dozen studies linking diverse boards with better performance and governance.
It was never about judging about by character. It was never about abandoning the idea of assigning value based on the color of skin, but the inverse of the old manner of the implementation of Jim Crow.
It’s a perpetual war on whiteness.