Republicans on the Senate Banking Committee are asking the United States Securities and Exchange Commission (SEC) to block Nasdaq’s proposed diversity requirements for listed companies.
Legislators led by Sen. Pat Toomey
Patrick (Pat) Joseph ToomeyThe government used the Patriot Act to collect records of website visitors in 2019 The appeals court ruled that mass collection of telephone data from the NSA is illegal. Dunford withdraws from consideration to chair the coronavirus supervisory panel MORE (R-Pa.), Graduated member of the committee, sent a letter SEC acting president Allison Herren Lee on Friday urging her not to approve the rule.
“It is not the role of NASDAQ, as a self-regulatory organization, to act as an arbiter of social policy or to force a single solution for all cases in markets and investors,” says the letter.
Senators argue that the rules interfere with the board’s obligations to its shareholders, violate the principles that govern securities disclosures, impose costs on public companies and discourage private companies from going public.
Nasdaq exposed his proposal in December, which would require listed companies to have a director who identifies herself as a woman and another who identifies herself as an underrepresented or LGBT minority. Foreign companies, or smaller ones, would have more flexibility and would be able to meet these requirements with two directors.
Companies that do not meet the requirements will not be subject to exclusion from the list if they provide a public explanation of why they were unable to meet the targets.
However, senators say in their letter that board members should be chosen based on “merit and the ability to serve in corporate performance”, adding that the proposal “requires the prioritization of a narrowly defined concept of diversity in the composition of the board. on merit ”.
“This weakens shareholders’ rights by disturbing the proper expectation that a company’s board will be serving the best interests of the company and its shareholders, complying with all applicable laws and maximizing returns,” they wrote.
“While we think that corporations in America benefit from advice that avoids group thinking and offers a diversity of perspectives and praises companies looking to increase diversity among their boards, we don’t think that NASDAQ should use its quasi-regulatory authority to impose social policies, ”the senators added.
In a statement to The Hill, Nasdaq spokesman Joseph Christinat said that “our proposal is a market-led solution that should simplify and standardize disclosure requirements, to avoid the type of regulatory overshoots the committee fears” .
The proposal came about amid an expansion of “investment in ESG”, which considers the environmental, social and governance factors of a company.