Republicans in the Senate Banking Committee are appealing to the U.S. Securities and Exchange Commission (SEC) to block Nasdaq’s proposed diversity requirements for listed companies.
The legislators led by Sen. Pat Toomey
Patrick (Pat) Joseph Toomey’s government used the Patriot Act to collect visitor files on the site in 2019. The Court of Appeals ruled that the NSA’s collection of telephone data illegally withdraws Dunford from the chair of the Coronavirus surveillance panel. (R-Pa.), Rank member of the committee, sent a letter to Acting SEC Chairman Allison Herren Lee, who on Friday urged her not to approve the rule.
“It is not the role of NASDAQ as a self-regulating organization to act as an arbitrator of social policy or to enforce a prescribed solution for all markets and investors,” the letter reads.
The senators argue that the rules interfere with the duty of a board of directors towards its shareholders, are contrary to the principles governing disclosure of securities, that public enterprises are charged and private enterprises are deterred from becoming public.
Nasdaq sets out its proposal in December, which requires listed companies to have one director who identifies them as female and one who identifies himself as an under-represented minority or LGBT. Foreign companies, or smaller companies, have more flexibility and could meet these requirements by having two female directors.
Companies that do not meet the requirements will not be removed from delisting if they provide a public statement as to why they were unable to achieve the objectives.
However, the senators say in their letter that board members should be elected on the basis of “merit and ability to serve in corporate performance”, adding that the proposal “forces the priority of a narrowly defined concept of diversity in management membership over merit . “
“It infringes on the rights of shareholders by disregarding the proper expectation that the board of directors of a company will serve the best interests of the corporation and its shareholders by complying with all applicable laws and maximizing returns,” they wrote.
“While we think US companies benefit from boards that avoid group thinking and offer a variety of perspectives and price companies that want to increase the diversity of their boards, we do not think NASDAQ should use its quasi-regulatory authority to pursue social policies. to impose, “the senators added.
Nasdaq spokesman Joseph Christinat said in a statement to The Hill: “Our proposal is a market-driven solution that should simplify and standardize disclosure requirements, in order to avoid the type of regulation the committee fears.”
The proposal comes amid an expansion of ‘ESG investment’, which takes into account the environmental, social and managerial factors of a business.