It’s not enough to just hire and elect us
NASDAQ announced a new requiring companies to hire women, people of color and LGBTQ+ members to their board. But enhanced diversity only works in corporate cultures that value various perspectives.
Behind every successful company is an impressive Board of Directors. The board approves a company’s strategy and priorities, hires the chief executive and determines executive compensation. Corporate boards also represent an old boys’ club that marginalizes women, Black and brown people and LGBTQ+ folks. According to an analysis published in The New York Times in September by the Institutional Shareholder Services, the boards of the 3,000 largest publicly traded companies remain overwhelmingly white. Black, Asian-American, Pacific Islander and Native American people make up 40 percent of the US population but just 12.5 percent of board directors, up from 10 percent in 2015. And Black directors make up just four percent of the total (up from three percent in 2015), while Black women make up just 1.5 percent of the more than 20,000 directors included in the analysis.
NASDAQ, one of the three most-followed stock market indices in the United States, announced plans today to change this: It plans to require boards to have at least one woman and one director who self-identifies as an underrepresented minority or LGBTQ+ within two years; bigger companies will be expected to have one of each type of director within four years. The announcement was first reported by Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni in the Times’ Dealbook newsletter. If companies fail to disclose diversity information, they could be delisted from the index; those that fail to meet the standards will have to publicly explain why to, I guess, up the shame quotient.
The index cites research showing the benefits of board diversity, from higher-quality financial disclosures to the lower likelihood of audit problems. “Diversity of the board is an important element of giving investors confidence in the future sustainability of the company,” NASDAQ CEO Adena Friedman said. “It’s not like we’re saying this is an optimal composition of a board, but it’s a minimum level of diversity that we think every board should have.” And according to Jared L. Landaw at the Harvard Business Review, a demographically diverse board may help a company identify and respond to market shifts and changes in consumer expectations more effectively than a homogenous board. Also, the boards should represent the composition of a company’s employees, customers and suppliers, which provides it with a better understanding of the company’s key constituencies.
On issues of diversity and inclusion, the onus has historically been on members of underserved and overlooked communities to prove ourselves as worthy of a seat at the table. But this is a misplaced responsibility because power in America is brokered not by individual merit but by systems rooted in white patriarchy. “White men lead our ineffective government with almost guaranteed reelection. They lead our corrupt and violent criminal-justice system with little risk of facing justice themselves. And they run our increasingly polarized and misinforming media, winning awards for perpetrating the idea that things run best when white men are in charge,” Ijeoma Oluo writes in her new book MEDIOCRE. “This is not a stroke of white male luck; this is how our white male supremacist systems have been designed to work.”
This is also why it’s insufficient to simply elect directors from underrepresented groups to the board. From Landaw’s previously linked HBR article: “To make sure that a board benefits from enhanced diversity in the boardroom, it must have a culture that values diverse perspectives. Directors with strong professional credentials and unique perspectives are of little benefit if this is not the case. As an experienced female director we interviewed stated, ‘You can have all the diversity in the world, but it won’t matter if you don’t have the right culture.’”
Despite the persistent trope, board rooms suffer less from a “pipeline problem” — the idea that there is a lack of qualified candidates — and more from pervasive laziness that results in narrow searches and lengthy term limits that maintain the status quo. In other words, it’s up to leaders and executives to demonstrate their companies and organizations as inclusive spaces for us. I look forward to the day when white men are willing to spend the emotional labor to interrogate the biases that inspire the belief that they got and have stayed where they are by dint of hard work alone. Perhaps it would lead to more empathy towards those of us who are exhausted from navigating their white male sensitivity just to feel seen, heard and acknowledged minus the code-switching, tongue-biting and fake-smiling we’ve perfected with the precision of a Beyoncé eight-count.
Much has been made about President-elect Joe Biden’s historic all-women White House communications team. But as important as it is that the president-elect appoints and nominates a cabinet and staff that reflects the country is the fact that these women view Biden as someone worth working for in the first place. “I think Senator [Bernie] Sanders [and I] had a rapport but we didn’t have a relationship,” Symone Sanders, senior adviser to the Biden campaign, chief spokesperson for Vice President-elect Kamala Harris and former press secretary for Bernie’s 2016 campaign, said in 2019. “I’ve built a real relationship with Vice President Biden, and I feel as though if anything were to happen, he would have my back.” Politics aside, this is the sentiment all of us with the power to cultivate the current and future generation of leaders and creators should strive to generate.
For now, it’s clear we’ve got a ways to go to achieve boardroom parity. Over the past six months, NASDAQ found that more than 75 percent of its listed companies did not meet its proposed diversity requirements. And it’s unclear if the Securities and Exchange Commission will even approve NASDAQ’s requirement. Then, as Dealbook notes, there are unanswered questions on whether exchanges could use their listing rules to require action on other hot-button issues like climate change. But as we’re reminded, on the 65th anniversary of Rosa Parks’s arrest for refusing to give up her seat to a white man, sometimes the wheels of justice grind slowly — whether it’s on a bus or in the boardroom.
In The Know
Actor Elliot Page came out as trans in a beautiful essay that spoke to the joy LGBTQ+ individuals — especially Black trans women — experience from living our truth and the fear of violence from those threatened by our existence. [@TheElliotPage]
Editor’s Note: The Supercreator stands with and values the creative contributions of its trans friends. For resources and support on coming out as trans for being a trans ally, visit The National Center for Transgender Equality.
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