How Nasdaq’s SEC approval could spur board diversity

August 9, 2021, 12:50 PM UTC

Good morning, Broadsheet readers! U.S. women won a record number of medals at the Olympics, the Business Roundtable commitment may have been “mostly for show,” and Nasdaq gets the go-ahead on board diversity. Have a great Monday.

– On board. Last week, the Broadsheet shared a recent sit-down interview with Nasdaq CEO Adena Friedman, in which she put forth one final pitch for the stock exchange’s proposal to diversify boards of directors.

It was perfect timing, because just a few days later, Nasdaq’s proposal received approval from the Securities and Exchange Commission. It wasn’t a unanimous decision—GOP SEC commissioners including Hester Peirce voted against the proposal. But passing that final hurdle will allow Nasdaq to now enact “comply or explain” board diversity requirements for its listed companies. Read more from Fortune‘s Declan Harty here.

“We are pleased that the SEC has approved Nasdaq’s proposal to enhance board diversity disclosures and encourage the creation of more diverse boards through a market-led solution,” Nasdaq said in a statement Friday. “We look forward to working with our companies to implement this new listing rule and set a new standard for corporate governance.”

For months, Nasdaq’s party line on its board proposal has been that it’s awaiting the SEC’s decision. So now, what comes next?

The stock exchange has an unprecedented opportunity to push companies that have been holdouts on diversifying their own boards. More than a tenth of the 3,000 companies listed on Nasdaq have no women on their boards, and more than one-third of listed companies lack racial diversity, reports Bloomberg. That means that Nasdaq’s requirements could potentially improve the diversity of hundreds of corporate boards. (Not all boards will likely change right away; if a board does not meet Nasdaq’s standards to include at least one woman and one board member with other diverse characteristics, including racial diversity and sexual orientation or gender identity, the company must explain to investors why it falls short.)

Friedman says that Nasdaq chose to become a force for change in this arena because of its role in corporate governance—of which the makeup of boards is a big part. “Diversity on boards is correlated with improved outcomes in two areas: risk controls—that’s important to us because investor protection is critical—and financial performance,” she explains.

The companies that make changes to comply with Nasdaq’s new standards will help test that hypothesis. We’ll stay tuned in the months—and years—ahead.

Emma Hinchliffe

The Broadsheet, Fortune’s newsletter for and about the world’s most powerful women, is coauthored by Kristen Bellstrom, Emma Hinchliffe, and Claire Zillman. Today’s edition was curated by Emma Hinchliffe


- An aide is out. Melissa DeRosa, top aide to Andrew Cuomo, resigned on Sunday. Her exit leaves the New York governor without one of his most loyal confidants as he faces calls to resign and the threat of impeachment. The attorney general's report that said Cuomo had sexually harassed 11 women also implicated DeRosa, accusing her of leading efforts to retaliate against one of the governor's accusers. New York Times 

- Record-setters. That's a wrap on the Tokyo Olympics. The final tally for Team USA? A record 66 medals in women's events—alongside an all-time low 41 medals in men's events. U.S. women won 23 gold medals out of the country's total 39. Wall Street Journal

- She's a track star. The Olympics closed out with another record, this one for Allyson Felix, the Athleta-sponsored track and field star who has become a leading voice for moms in sports. After her team won the women's 400-meter sprint relay this weekend, Felix won her 11th Olympic medal and seventh gold, making her the most decorated U.S. track and field athlete in Olympics history. CNN

- Voice for change. With the launch of Apple's Siri, voice actor Susan Bennett didn't know her voice would be used for the virtual assistant. A similar situation surfaced again recently, when voice actor Bev Standing sued TikTok and parent company ByteDance for using her voice on the app. It was just the latest example of how the voices of women in tech are still being erased, this piece argues. MIT Technology Review

MOVERS AND SHAKERS: At the National Association of Corporate Directors, newly named board members include former Bed Bath & Beyond interim CEO Mary Winston; former interim Redbox CEO Nora Denzel; TechEdVentures president Jocelyn Carter-Miller; and former interim CEO for Frontier Medical Research Sandra A. J. LawrenceGina Stikes, former head of public relations at Quibi, will be Eventbrite's chief communications officer. 


- Big talk, little action? Two years ago, the Business Roundtable unveiled a new commitment to stakeholders beyond shareholders. New research finds that that commitment was "mostly for show" and did not represent meaningful change. Fortune

- Onscreen objectification. A new report from the Geena Davis Institute on Gender in Media finds that female Asian and Pacific Islander characters are more likely than female characters of any other race to be objectified onscreen. Seventeen percent of female AAPI characters were verbally objectified, and 13% were visually objectified. CNN

- All talk. How can video meetings be more equitable—and avoid some common pitfalls, like men talking over women? Cisco is testing some new features on Webex to try to solve those problems like a "Round Table" setting that gives each participant an allotted period of time to speak. Protocol

- Ideas for inclusion. How can companies improve inclusion for Black employees at work? Walmart chief people officer Donna Morris and McKinsey senior partner Lareina Yee offer four ideas in this piece for Fortune, from establishing or reestablishing trust to building systems that create opportunity. Fortune


On TikTok, being 'written by a woman' is the ultimate compliment Mashable

Beyoncé announces new clothing line inspired by Black cowboys, Houston Rodeo memories Houston Chronicle

Aaliyah’s music will finally be streaming. What took so long? New York Times


"The industry has really shifted, even in just the time that I’ve been working. Changing the actual culture—changing in practice—takes longer."

-Actor Gemma Chan, on the cover of British Vogue

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