WASHINGTON, December 2, 2020 – The Hispanic Association on Corporate Responsibility (HACR) endorses yesterday’s filing by Nasdaq proposing that all listed companies report full and consistent diversity statistics related to its board of directors. If approved by the U.S. Securities and Exchange Commission (SEC), the new standard would also require each company to have at least two diverse directors—one self-identifying female and one self-identifying minority or LGBTQ+ director.
“As a national organization who advocates for more Hispanics inclusion at all levels of corporate America, especially on corporate boards, we stand with Nasdaq in its effort to take tangible steps toward ensuring diversity and inclusion in Corporate America. We strongly encourage the SEC to adopt these proposed rules for Nasdaq-listed companies,” said Cid Wilson, president and CEO of HACR. “We call on the New York Stock Exchange to consider similar measures to create a more equitable corporate world and provide transparency to its listing companies’ stakeholders.”
According to the Missing Pieces Report: The 2018 Board Diversity Census of Women & Minorities on Corporate Boards, 15.0% of Fortune 500 board seats are held by people of color (Blacks, Latinos, and Asian Americans) and 21.9% of the seats are held by women. Only 3.5% of Fortune 500 board seats are held by Latinos of which only 0.7% of the seats are held by Latinas. The Missing Pieces report is a joint project of the Alliance for Board Diversity (ABD) and Deloitte. ABD member organizations include Catalyst, HACR, Leadership Education for Asian Pacifics (LEAP) and The Executive Leadership Council.
Nasdaq’s proposal intends to give investors and stakeholders access to the makeup of each company’s board of directors and provide assurance that the companies are intentionally considering diversity when selecting board members. Studies have shown that increased board diversity is associated with increased financial operation and corporate governance. The proposed rules reinforce HACR’s long-standing positions that Corporate America should have Hispanic representation, among other diverse populations, on their boards.
If accepted by the SEC, Nasdaq-listed companies will have to make public their board-level diversity statistics within one year. Within two years, all companies will need to have at least one diverse director. Boards are expected to have at least two diverse directors within four or five years of implementation, depending on the company’s listing tier. Those unable to meet the objectives will have to publicly explain their noncompliance.
Founded in 1986, the Hispanic Association on Corporate Responsibility (HACR) is the nation’s leading corporate advocacy organization representing 14 national Hispanic organizations in the United States and Puerto Rico. Its mission is to advance the inclusion of Hispanics in Corporate America in the areas of Employment, Procurement, Philanthropy, and Governance. Through our corporate leadership advancement programs, Symposium best practice conferences, research initiatives, and public communications, HACR is illuminating The Power of Hispanic Inclusion™ throughout Corporate America.