Corporate America has long been criticized for its lack of gender and racial diversity, with underrepresented racial groups making up just 12.5% of board seats at the 3,000 largest publicly traded companies, and women making up just 21%.
To fix this issue, several companies, and even a few states, have implemented diversity mandates. Earlier this year, Goldman Sachs said it would not take a company public unless it had at least one diverse board candidate, with CEO David Solomon saying they will place a special “focus on women.” In 2018, California became the first U.S. state to mandate that all public companies within the state have at least one woman on their board by December 2019, resulting in 68 new women being added to company boards following the announcement. This fall, the state implemented a similar law as it relates to racial diversity.
Now, Nasdaq is stepping up to the plate with its own diversity mandate that will require listed companies to have at least two diverse board members, including one person who self-identifies as female and one person who self-identifies as an underrepresented minority or LGBTQ+. An underrepresented minority, Nasdaq clarifies, is anyone who self-identifies as Black or African American; Hispanic or Latinx; Native American or Alaska Native; Native Hawaiian or Pacific Islander; or Asian.