 CLOSING THE GAP Tuesday, August 10, 2021 
Corporate boards could soon be getting more diverse thanks to the Securities and Exchange Commission's approval of Nasdaq's diversity mandate.
Under Nasdaq's new rules, which were first proposed to the SEC in December, companies listed on the exchange will now have to have at least one woman on their board and at least one member who self-identifies as an underrepresented minority or one member who is LGBTQ+. The time frame for companies to have at least two diverse board members depends on the firm's tier in the Nasdaq Stock Market. But, any company that fails to meet these requirements will be forced to explain why to the exchange in writing.
"We are taking the leadership here because there has been so little action on this front and we do think it's an important thing for us to do," Nasdaq's president and CEO, Adena Friedman, told CNBC's "Squawk Box" in December.
Of the more than 3,000 companies listed on the exchange, more than 1 in 10 have no female directors and more than a third do not have a racially diverse director, reports Bloomberg. This is despite studies showing that companies with diverse leadership perform better than those without.
The SEC's recent approval of Nasdaq's new mandate has been met with both praise and criticism. While Democrats and some companies like Goldman Sachs, which implemented its own diversity mandate in 2020, approve of this new push, a few Republican leaders have argued that the rule "misses the mark."
"By defining diversity by race, gender and sexual orientation, NASDAQ's mandate will inevitably pressure companies to subordinate crucial factors such as knowledge, experience and expertise when selecting board members," Sen. Pat Toomey, a Republican on the Senate Banking Committee, told CNBC.com.
Carolyn Childers, co-founder of a private network for C-suite women called Chief, told CNBC Make It in December that while she supports diversity mandates and believes they can be effective, she fears that some company leaders who are forced to diversify their teams will fall short of ensuring their culture is inclusive enough for diverse candidates to thrive.
"My only concern with a mandate would be that it can create a less inclusive feeling internally versus when you organically get there," she says, explaining that this can easily happen if a company's leadership hits a one- or two-person quota and thinks they're done with diversity hiring.
Do you think diversity mandates are the most effective way to add more women, people of color and LGBTQ+ candidates to a team? Share your thoughts with me via email at courtney.connley@nbcuni.com or on Twitter @ClassicalyCourt.
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Selasa, 10 Agustus 2021
Are diversity mandates key to eliminating all-white, all-male boards?
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