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A Call to Action for Corporate America

The negative impact of harmful biases can easily be seen in places of wealth, income, and employment. In their efforts to address this disparity within corporate board member composition, the #Nasdaq stock market filed a proposal with the #SEC in December of 2020. Said proposal would require all companies listed under Nasdaq to disclose their #board diversity. This would allow #shareholders tangible updates on the composition of a company’s board members on a year-to-year basis. In August of 2021, a lengthy nine months after the submission of the proposal, it was finally approved. However, the transition towards diversity would not commence for another twelve months, beginning in August of 2022.

The new Nasdaq standard sets a bare minimum goal for diversity. It requires larger companies to have at least two diverse directors by August of 2025. One of these two board members must be someone who self-identifies as female. The other board member will be someone who self-identifies as an underrepresented person of color. Alternatively, a board member who is part of the LGBTQ+ community may also fulfill the second requirement. Nasdaq-listed companies have access to a variety of free board recruiting services and webinars. These resources are set in order to help companies understand the rule and begin diversifying their board composition when possible.

Discourse on the diversification of boards has been an effect that this regulation has had among the demographic of people that need to have it. Such a conversation persuades white board members and those in power to become more conscious of the disparity among them. Why has there been such a struggle to include minority groups into higher ranking positions within corporate America? The push back that Nasdaq’s new standard has caused is a telling sign of the reluctance to necessary change, and why not much progress has been made. Conservative groups who strongly oppose this diversity standard insist it is discriminatory and violates one’s constitutional rights though the intent of the new requirement is to do the exact opposite. One can argue that doing nothing in the face of inequality among the highest-ranking positions in corporate America is discriminatory in and of itself, albeit passive.

It should be noted again that this requirement of board member diversity disclosure only applies to the company’s board member composition and not to the company as a whole, thus excluding management and employees. The companies expected to follow the Nasdaq requirement include but are not limited to #Apple#Amazon#Facebook, and #Microsoft.

What are your thoughts on the current state of board member diversity? Let us know on LinkedIn and Twitter!

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