WASHINGTON – A group of Senate Republicans denied Nasdaq’s push to achieve greater diversity on corporate boards, saying it interferes with board members ’duty to govern in the best interests of shareholders and could hurt financial performance.
In a letter Friday, 12 Republican members of the Senate Banking Committee called on the Securities and Exchange Commission to reject Nasdaq’s proposal to demand that thousands of companies listed on its stock exchange include women, racial minorities and people. LGBT on their boards.
“We congratulate individual companies for the proactive efforts they have already made in hiring, promoting and retaining diverse talent,” wrote Senators, led by Pat Toomey, of Pennsylvania. “However, it is not the role of the Nasdaq … to act as an arbiter of social policy or to force a mandatory solution for all markets and investors.”
The Nasdaq proposal, presented to the SEC in December, would require listed companies to have at least one woman on their boards, in addition to a director who is a racial minority or who identifies as a lesbian, gay , bisexual, transgender or queer. Non-compliant companies should justify their decision to remain listed on the Nasdaq.
Nasdaq, in a statement Friday, said its proposal “is a market-led solution that should simplify and standardize disclosure requirements to avoid the kind of regulatory reach that critics fear.”