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Sunday, July 21, 2024

GOP Sens. Urge SEC to Block NASDAQ Quotas for Race, Gender on Corporate Boards

'While we think America’s corporations benefit from boards that avoid groupthink...'

Republicans on the Senate Banking Committee sent a letter to the Securities and Exchange Commission expressing their opposition to a new race, sex, and gender diversity rule, according to a press release.

The SEC will vote on whether to accept a proposed NASDAQ regulation that would compel publicly traded companies to fill their boards of directors with people on the basis of their sex, gender, and skin color.

Sens. John Kennedy, R-La., and Pat Toomey, R-Pa., the committee’s ranking member, led a group of Republicans in opposing the rule.

“While we think America’s corporations benefit from boards that avoid groupthink and offer a diversity of perspectives and commend firms that look to increase diversity among their boards, we do not think NASDAQ should be using its quasi-regulatory authority to impose social policies,” the senators wrote.

The rule would openly discriminate against men, whites, and heterosexuals by creating a legal preference for self-identified women, non-whites, and LGBTQIA+ people.

Public companies would either have to comply with these requirements or provide a public explanation for their failure to meet diversity standards.

If the companies refuse to implement these discriminatory policies, then they would be subject to removal from NASDAQ.

The rule “interferes with a board’s duty to follow its legal obligations to govern in the best interest of the corporation and its shareholders,” the senators wrote. “It violates central principles of materiality that govern securities disclosures, and finally, it harms economic growth by imposing costs on public corporations and discouraging private corporations from going public.”

The senators focused on the rule’s inconsistency with a “free market” and a proper cost-benefit analysis.

The Republicans senators did not bother to fight the cultural battle that the rule represents or to criticize the rule for its blatant discrimination against males, whites, and heterosexuals.

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