January 1, 2021
As other commenters have observed, board diversity is crucially important to investors. Indeed, that is an understatement. When I am considering whether to invest in a company, probably the first thing I want to know is the color and sexual orientation of each director. Any company that does not voluntarily endorse the goal of having a diverse board needs the proposed rule lest investors lose confidence in management. Thus, the SEC should approve it because at a minimum it will require companies to disclose this vital information.
However, the proposed rule is just a start. As NASDAQ says, it does not establish a quota for diversity directors (as if that were a bad thing). It merely requires a company that has not met the rule's quotas to explain why. But, what if a company's explanation is that it does not believe that having a diverse board is necessarily desirable? That is completely unacceptable. Therefore, I recommend that every company listed on NASDAQ be required to affirm annually that it believes that having a diverse board of directors is in the best interest of its shareholders.
Additionally, as some other commenters have pointed out, the proposed rule is underinclusive. It should be amended to include other groups that have historically been underrepresented on boards of public companies. First, while transgender people are included, crossdressers are notably absent from the proposed rule. This grievous omission needs to be addressed before the rule is approved.
Another group that is inexplicably excluded from the proposed rule is illegal aliens. Conservative estimates put the number of undocumented immigrants at more than 10 million. I know of not a single one that is on the board of a NASDAQ company so that is a n enormous pool of talent that should be tapped for the benefit of investors. And since many illegal aliens are not fluent in English, the proposed rule should be amended to eliminate that as a requirement for board membership.
Lastly, many boards routinely discriminate against ex-felons. These people have paid their price to society and if they otherwise qualify, there is no good reason to deny them from becoming directors of NASDAQ listed companies.
Despite these mild criticisms, I say well done NASDAQ and lets keep the pressure on corporate America because everyone should be able to be a director, not just privileged white \"normal\" male citizens with no criminal past.