U.S. Senate Republicans ask SEC to reject Nasdaq diversity rules
Reuters
Published Feb 12, 2021 01:42PM ET
Updated Feb 12, 2021 02:00PM ET
By Ross Kerber
(Reuters) - Republican members of the U.S. Senate's Banking Committee on Friday urged securities regulators to reject corporate diversity rules proposed by Nasdaq Inc.
In a letter to the head of the U.S. Securities and Exchange Commission, the Republicans said the effort by the exchange operator to set boardroom diversity requirements for listed companies would interfere with boards' duties to their shareholders, violate securities disclosure principles and could impose costs on companies.
"While we think America’s corporations benefit from boards that avoid groupthink and offer a diversity of perspectives and commend firms that look to increase diversity among their boards, we do not think NASDAQ should be using its quasi-regulatory authority to impose social policies," stated the letter, signed by Pat Toomey, the committee's top Republican, and 11 other senators.
On Dec. 1 Nasdaq outlined rules that, if approved by the SEC, would require listed companies on its U.S. exchange to disclose boardroom diversity statistics and to have at least two diverse directors, including one woman, or explain why they do not.
The proposal comes as part of a broader debate about a lack of diversity among top U.S. executives. Among the top 200 companies in the S&P 500, African-Americans held only about 10% of board seats and Hispanic or Latino people held only 4% of board seats, a study last year found - representation below their respective shares of the U.S. population of 13% and 19%.
The lack of self-reported disclosure by corporate directors has complicated efforts to increase those numbers, partly by making it difficult for investors to measure boardroom representation.
Asked about the Republican's letter, Nasdaq spokesman Joe Christinat said that "Our proposal is a market-led solution that should simplify and standardize disclosure requirements to avoid the type of regulatory overreach the critics fear."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.