HACR Praises SEC Approval of Nasdaq-Backed Proposal for Board Diversity Requirements
August 9, 2021 – Washington, DC – The Hispanic Association on Corporate Responsibility (HACR) praises the U.S. Securities and Exchange Commission (SEC) on its decision to approve Nasdaq’s proposal that would require new mandatory board diversity on Nasdaq-listed companies. This decision follows Nasdaq’s push to require corporations to disclose board race and gender statistics as part of their listing requirements, and to have a minimum of two diverse directors—one self-identifying female, and one self-identifying underrepresented minority or LGBTQAI+ director. Those companies that do not meet the new requirements would be required to explain their noncompliance.
“As a national organization that advocates for increased Hispanic inclusion at all levels of corporate America, especially on corporate boards, we applaud the SEC for approving new board diversity guidelines and for using measurable strategies to hold companies accountable for a more equitable corporate governance landscape,” said Cid Wilson, president and CEO of HACR. “We thank Nasdaq for leading this initiative with its filing to the SEC and are proud to have partnered with Nasdaq in this movement to improve diversity on corporate boards.”
“We look forward to working with our publicly traded corporate partners to improve Hispanic representation on boards and providing our data-driven expertise to support this movement. Further, we call on the New York Stock Exchange to consider similar measures to support greater board diversity for its listed companies,” concluded Wilson.
The original Nasdaq proposal, which was publicly backed via written support from HACR and other organizations in 2020, was amended in February 2021 to provide flexibility to newly listed companies and those with small boards. The amendment also grants a one-year grace period for all companies to meet the requirements. Under the SEC-approved proposal, Nasdaq-listed companies will be required have at least one diverse director within two years and two diverse directors within four to five years.
According to research published by the Alliance for Board Diversity (Catalyst, HACR, Leadership Education for Asian Pacifics [LEAP] and The Executive Leadership Council) in collaboration with Deloitte titled: Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 Boards, 6th edition, only 4.1% of Fortune 500 board seats are held by Latinos, of which only 1% are held by Latinas. Growth in representation has remained mostly stagnant for more than a decade, based on HACR research. Nasdaq’s new requirements will give investors and stakeholders access to the makeup of corporate boards and potentially improve Hispanic representation at the director level.
About HACR
Founded in 1986, the Hispanic Association on Corporate Responsibility (HACR) is the nation’s leading corporate advocacy organization representing 14 national Hispanic organizations whose reach encompass all 50 U.S. 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 engagements, HACR is illuminating The Power of Hispanic Inclusion™ throughout Corporate America from the corporate front lines to the corporate boards.
