Wall Street and City want to end domination of white men on boards

The impetus did not come from the political sphere, but from Nasdaq, the second American stock exchange (behind the New York Stock Exchange), where Internet and IT giants such as Google and Amazon are listed in particular. Apple or Chinese Baidu. The New York market now requires companies listed on its market to include on their board of directors (CA) at least one woman and one personality from sexual or ethnic minorities; or explain why they don’t.

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This new rating rule in favor of diversity was first proposed by the Nasdaq in December 2020, a few months after the death of George Floyd, a black citizen asphyxiated under the weight of a white police officer in Minneapolis (Minnesota), May 25, 2020. A broad consultation followed, open to investors, businesses and elected officials of Congress.

Republicans on the Senate Banking Committee have been hostile to it, while Democratic Senators Catherine Cortez Masto (Nevada) and Kirsten Gillibrand (New York), as well as Sheryl Sandberg, Facebook COO and feminist activist, have provided their support. After eight months of reflection, the Securities and Exchange Commission, the US stock market policeman, finally approved this new regulation. Support greeted on August 6 by a Nasdaq press release, saying “Looking forward to working with [les] companies to implement this new listing rule and establish a new standard for corporate governance ”.

More and more funds are now looking to invest in companies with a certain diversity

From the time of their next general meetings, in 2022, the approximately 4,000 companies listed on the Nasdaq will therefore have to publish statistics on diversity within their boards, whereas investors had previously had no visibility in the matter. However, more and more funds are now looking to invest in companies with a certain diversity.

Listed companies must also have at least two directors “From diversity”, including a woman and a member “Identifying as an under-represented or LGBTQ + minority”.

New standard

Small boards of directors will benefit from some flexibility. The stock exchange operator has also provided for an adaptation period, from two to five years, depending on the level of the firm’s listing. “A company that is unable or unwilling to achieve the recommended diversity target is required to publish an explanation”, specifies a spokesperson. Otherwise, “It will not be in accordance with a listing rule and could receive a notice of delisting”.

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