NASDAQ decision will reinforce diversity agenda for corporatesSachin Mohan
Greater emphasis on diversity is now further reinvigorated by NASDAQ (with approximately 3,000 companies on its exchange) decision to include diversity as one of the criteria for listing. NASDAQ has filed a proposal with SEC which proposes for listed companies to have at least a woman on the board, and a director of racial minority or LGBT; otherwise the company has to provide justification of not doing so.
In my previous blog on “Beginning of the era of diversity data disclosure at granular level?” I opined that it would be of paramount importance in future to provide more granular level of data about diversity. There has been growing interest of investors in the last few years about the work place information on equity policies, ethnicity, and race etc. This indicates that ESG criteria is becoming an important factor in investment decisions by investors.
Here is the proposal of NASDAQ:
All Nasdaq-listed companies: Disclose publicly board-level diversity statistics within one year of the SEC’s approval of the listing rule.
All companies: One diverse director within two years of the SEC’s approval of the listing rule.
Nasdaq Global Select Market and Nasdaq Global Market: Have two diverse directors within four years of the SEC’s approval of the listing rule.
Nasdaq Capital Market: Have two diverse directors within five years of the SEC’s approval.
Till now not many companies are publishing their diversity data. Corporates need to grapple with the idea of how to plan and improve workforce diversity if they haven’t done so yet. A bold initiative of publishing the detailed diversity data across gender, race, ethnicity, sexual orientation, and other diversity types would be welcomed by investors