Nasdaq is pushing for greater diversity among the more than 3,000 companies listed on its exchange.

Nasdaq filed a proposal Tuesday with the Securities and Exchange Commission asking the regulatory body to adopt new listing rules surrounding the makeup of companies’ board of directors, as well as greater transparency around who fills the seats in the boardroom.
Under the proposal, the majority of companies will be required to have at least two diverse board directors: one woman, and one person who identifies as either an underrepresented minority or LGBTQ. If a company cannot meet these requirements, it will not be delisted, but it will need to explain why it cannot meet the goals.
Should the proposal be approved by the SEC, all companies would have to disclose board-level diversity statistics publicly within one year of the policy being passed. Nasdaq said in a statement that the timeframe for companies to meet the board requirements will depend on each company’s listing tier, but that all companies will be expected to have at least one diverse director within two years of the SEC’s approval.

“Disclosure is really the foundation of our markets and our economy,” Nasdaq President and CEO, Adena Friedman, told CNBC’s “Squawk Box.” “So we rely on companies to make full and accurate disclosures to inform investors so that investors can make their own decisions as to which companies they want to invest in and what they expect of the companies where they’re an investor.”

Nasdaq’s proposal follows countless studies touting the benefits of greater diversity at the board level and throughout companies more broadly.

>Learn More: https://cnb.cx/36qSOWZ

LCDA recently launched the first of its kind California Boardroom Equity Scorecard and Tracker, a valuable resource for stakeholders and shareholders and the only publicly available tool that tracks the number of Latino/as on public company boards in California.

Developed as part of the Latino Voices for Boardroom Equity initiative, the Scorecard and Tracker will report the progress of over 650 California public companies and their board composition on a quarterly basis—providing the transparency needed to hold California public companies accountable for the inclusion of Latinos in the boardroom.

The Scorecard indicates, at 2.1%, Latinos are the least represented on California public company boards, while White/Caucasians comprise 84% of board seats, Asian/Pacific Islanders hold 9.7%, and Blacks/African Americans have 2.9% of boardroom seats. Even more alarming, new appointment trends reveal that Latinos continue to fall behind by any measure. Recent LCDA analysis reveals that 37% of California companies have all-white boards of directors.

MEDIA BRIEFING: California Boardroom Equity Scorecard and Tracker. >Tune In: https://bit.ly/39dDyia

Last month, Institutional Shareholder Services Inc. (ISS) released updates to its 2021 ISS benchmark proxy voting policies.

Among the changes, ISS is adopting a new voting policy with respect to U.S. boards lacking racial and ethnic diversity.

The policy will have a one-year transition period to 2022. In 2021, ISS research reports will highlight boards of companies in the Russell 3000 or S&P 1500 that lack racial and ethnic diversity (or lack disclosure of such), with the goal of helping investors identify companies with which they may wish to engage and to foster dialogue between investors and companies on this topic. >Learn More: https://bit.ly/3ormmdB

LCDA IN THE NEWS

Squawk Alley: Esther Aguilera recently sat down with CNBC's Julia Boorstin to discuss how California’s Boardroom Equity Scorecard helps spread light on diversity. >Tune In: https://cnb.cx/33yWSmx

Bloomberg: The Latino Corporate Directors Association’s new director tracker showed that Latinos hold only 2.1% of the board seats at 674 public companies in the state even though Hispanics are California’s largest ethnic group, at 39% of the population. >Read More: https://bloom.bg/2JqDlh5

AL DÍA Business: The LCDA released eye-popping numbers about corporate board diversity — or more accurately, a lack of corporate board diversity — in that state, founding that of 662 publicly traded companies based in California, 233 were all white.. >Read More: https://bit.ly/39y6e5F

The Sacramento Bee: In an effort to measure the impact of California’s new board diversity law, the Latino Corporate Directors Association has launched a new tool that will measure the number of Latino directors in California’s public board rooms. >Read More: https://bit.ly/2JGYBiA

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