The Nasdaq Board of Directors -the stock exchange index listing the shares of major technology companies in the United States– requested the U.S. Securities and Exchange Commission (S.E.C) that the companies listed in this index must publish “diversity statistics” of the members of the board of directors, and also within two years the boards of directors must appoint at least one woman or a “diverse” director within of the joints.
For companies listed on the Nasdaq Global Select Market and Nasdaq Global Market, are expected to appoint at least 2 “diverse” directors within 4 years if S.E.C approves Nasdaq’s petition.
In addition to being racist, calling someone the condescending epithet “diverse” for not being white, today Nasdaq board went against any principle of efficiency in the market and decided to ask the SEC to impose a measure that doesn´t help nothing to diversity, but it does impose a series of unnecessary requirements on the boards of directors of the main technology companies in the world.
A political petition with no relation to S.E.C’s functions
In case the S.E.C approve this regulation more than 3,000 publicly listed companies would be forced to report on their “diversity statistics” and if they did not”face the consequences”, they would be forced to publicly explain why they did not, in other words, subject them to public humiliation.
Although Adena Friedman, CEO of Nasdaq, still does not ask S.E.C that the board members of the companies that make up the index certify that they know how to read a Financial Statement, it seems to be of greater urgency to force diversity within the boards of directors in the technology sector.
Most worryingly, Nasdaq seeks not only to impose this measure on publicly traded companies but also on private ones, as Friedman said: “The ideal result would be that S.E.C will take the role here and apply this measure both in public and private companies, as they also exercise control over the Private Capital Industry.”
Naturally, as this is “capitalism”, Nasdaq proposes a “corporate partnership” to carry out the diversification of corporate boards, as indicated in his press release: “Nasdaq will also present a partnership with Equilar, the leading provider of data solutions corporate leadership, to help companies listed in Nasdaq with the challenges of their board composition planning.”
Despite the obsession with making corporations more diverse, the Equilar board of directors has no person of color or openly LGTBQ, as noted by the financial news portal Zero Hedge.
Currently 75% of the companies listed in the index do not meet the requirements proposed by Nasdaq, which means that this measure should be approved by S.E.C will carry a lot of headaches for companies.
Although having more diverse work teams can lead to more imaginative corporate decisions, there is no evidence to conclude that forcing parity quotas within boards of directors leads to better investment decisions in the market.
Otherwise the S.E.C should reject Nasdaq’s request as it has no real relationship to the mission it was created for: To protect investors, maintain fair, orderly, efficient markets, and facilitate capital formation.