US appeals court rejects Nasdaq's diversity rules for company boards

[u/ShivasRightFoot]

https://apnews.com/article/nasdaq-sec-dei-diversity-board-a3b8803a646a62aeb2733bbd4603e670

[u/ShivasRightFoot]

According to the article this is the heart of the new rules and what got it rejected by the court:

The proposed policy — which was to be the first of its kind for a U.S. securities exchange — would have required most of the nearly 3,000 companies listed on Nasdaq to have at least one woman on their board of directors, along with one person from a racial minority or who identifies as gay, lesbian, bisexual, transgender or queer. It also would have required companies to publicly disclose statistics on the demographic composition of their boards.

The court specifically admonished the SEC for approving the new proposed rules:

The court said in its ruling that the SEC should not have approved Nasdaq’s proposed diversity policy.

“It is not unethical for a company to decline to disclose information about the racial, gender, and LGTBQ+ characteristics of its directors,” the ruling stated. “We are not aware of any established rule or custom of the securities trade that saddles companies with an obligation to explain why their boards of directors do not have as much racial, gender, or sexual orientation diversity as Nasdaq would prefer.”

NASDAQ offered statements in support of the policy and likely will appeal the decision.

This is the latest in a series of court defeats for reverse-discrimination policies supported by some people on the extreme political Left. The fact Democrats have publicly supported these policies is frankly shameful. This is racial discrimination pure and simple.

[u/Ensemble_InABox → u/ShivasRightFoot]

It's great that this is coming to light very publicly. It's fairly well known that Blackrock does this informally and mostly quietly to companies they own major stakes in. Essentially the exact same policy, they pressure companies financially to remove existing board members to ensure that they have at least one non-white, non-asian board member, and as far as I have seen, an LGBTQ person suffices.

As an aside, I've always found LGBTQ DEI just straight-up bizarre. How do they even verify someone's sexuality? It's comical.

[u/Nissan_Altima_69 → u/Ensemble_InABox]

Some job applications ask you your sexuality lol, its like "none of your fucking business". Its a different situation and they do it to avoid law suits, but its just so bizarre we've found ourselves here lol

[u/Ensemble_InABox → u/Nissan_Altima_69]

Most tech companies do that, it's insufferable. My old co would also survey employees on their sexuality and gender identity, I learned from a friend in HR that almost 80% of the company responded: "prefer not to disclose".

[u/Nissan_Altima_69 → u/Ensemble_InABox]

Seriously, how fucking weird is that? I mean, talking with co workers about your spouse or someone your dating is normal, but this shit is just getting creepy. I'd rather the law say they arent allowed to ask this at all

[u/Gary_Glidewell → u/Ensemble_InABox]

Most tech companies do that, it's insufferable. My old co would also survey employees on their sexuality and gender identity, I learned from a friend in HR that almost 80% of the company responded: "prefer not to disclose".

It's so much worse than that:

I used to work for A Giant Megacorps that was whittling down their employee numbers by layoff after layoff after layoff. In ten years, they reduced their headcount by half. They didn't do it by "massive layoffs," just a constant drip-drip-drip of layoffs. A couple of times a year, I would learn that 25% of my coworkers were laid off, and then I eventually got pink slipped too.

At the same place, HR routinely blasted out emails celebrating "diversity and inclusion" and inviting the employees to self-identify. The self identification was "voluntary." (If I'm not mistaken, it's not legal to ask someone who they prefer to have sex with, as a condition of employment.)

I mentioned this to a very old relative of mine, and they remarked offhand, that this was how the Nazis got the Jews into concentration camps. They got them to self identify, put them on a list, and then off they went. (Unironically aided by IBM, who is still involved in the same crap today.)

So my relative told me: just don't self identify. Don't fill out the survey. Keep your name off the list.

After he clued me in to this, I began to notice he was right: everytime that HR blasted out a survey where they asked people to self-identify, that email was followed up by a round of layoffs, about two months later.

Was the email blast and the layoffs connected? Can't say 100%, but I think so.

[u/ShivasRightFoot → u/Ensemble_InABox]

Essentially the exact same policy, they pressure companies financially to remove existing board members to ensure that they have at least one non-white, non-asian board member, and as far as I have seen, an LGBTQ person suffices.

I'd be interested to see this documented. Is there a series of news articles on the topic? I am aware of their incident with the Exxon-Mobile board over environmental policies, but nothing with specific regard to race in terms of an actual case. I am aware that the DEI part of ESG accounting is specifically racial (you need to dig pretty deep to find it; first you need the ESG bit on DEI and then that references an NGO created set of reporting standards which defines "diversity" to exclude White people and Men), but not of a specific incident where Blackrock applied pressure on DEI policies per se.

[u/Ensemble_InABox → u/ShivasRightFoot]

Most of my knowledge is just pieced together over the years from personal investing, but here's a Fox Business article from last year quoting Larry Fink on "forcing behaviors" relating to inclusion. He also talked about racial equity in his 2022 letter to CEOs.

Despite being one of the largest companies in the world and the largest asset management firm ($9 trillion AUM), Blackrock operates largely behind the scenes and gets little media coverage.

Feel free to take this with a large grain of salt, but I'll add a personal anecdote as well. I know the CEO and Board Chairman of a small (200 ee) medical device company that's been public since 1999. The company has had the same board of directors for 25 years, a tight-knit group of people who were key leaders in the company's early days, but are not diverse. He's been under pressure since 2020, from Blackrock, to diversify his board. He's the founder and has basically called their bluffs - votes of no confidence to remove him as chairman, public pressure, divestment threats, etc. Nothing has really happened and the board hasn't changed, and he's about ready to retire anyways.

[u/ShivasRightFoot → u/Ensemble_InABox]

He's been under pressure since 2020, from Blackrock, to diversify his board. He's the founder and has basically called their bluffs - votes of no confidence to remove him as chairman, public pressure, divestment threats, etc.

I'd be really curious how these threats were communicated. I'd be suspicious that he may be reading into things and imposing an interpretation, and while I'd be inclined to believe it I don't think I'd find it convincing fully. Also I could see something more direct, like an email saying "We expect companies to have XYZ and we will potentially vote shares if otherwise," which is not outside the realm of possibility.

[u/Sideswipe0009 → u/ShivasRightFoot]

The proposed policy — which was to be the first of its kind for a U.S. securities exchange — would have required most of the nearly 3,000 companies listed on Nasdaq to have at least one woman on their board of directors, along with one person from a racial minority or who identifies as gay, lesbian, bisexual, transgender or queer. It also would have required companies to publicly disclose statistics on the demographic composition of their boards.

I'm guessing most boards would already be in compliance, so I'm not seeing the need for this.

When CA passed their law requiring boards be 40% woman and minorities, something like 80% of businesses were already in compliance.

I'll never understand these types of laws and rules. Businesses are pretty already doing what they propose to legislate. It's like passing a law that dogs must shake after getting wet. My only guess it that it's because these progressive types believe racism and sexism to be more rampant than it really is. It's like they think we've gone backwards to 1950 or something.

[u/Apt_5 → u/Sideswipe0009]

My only guess it that it's because these progressive types believe racism and sexism to be more rampant than it really is. It's like they think we've gone backwards to 1950 or something.

They DO unironically believe this. It's how they justify their activism, it's what motivates them. They've romanticized the great civil rights struggles of the past and they want to be that brave underdog, too. They need to believe things are just as bad now- or worse- so what they do is just as meaningful.

Their lack of historical knowledge is clear. They don't realize how things truly were awful in the relatively recent past, and that social progress was made at almost exponential rates. They don't realize the fights really were basically already won in the 2010s, and that society was largely tolerant by then.

They've convinced themselves that this is the worst time to be a minority b/c individual instances of racism/sexism still exist. It's a wild mindset, honestly. They live on the internet, where a single moment goes viral and that translates to rampant in their minds.

So many also proclaim that this is the worst/hardest time in human history to be alive, period, which leaves me even more at a loss. I truly do not understand how someone can believe such things.