Mercy Investment Services has been a longtime member of the
Thirty Percent Coalition, which advocates for diversity in corporate boards of
directors to better represent company shareholders. Studies have shown that
companies with diverse boards perform better.
The coalition has been following Nasdaq’s recent
announcement regarding board diversity requirements for companies on its U.S.
exchange. The new rule requires companies to include at least two diverse
- One self-identified woman director
- One director who self-identifies as an
underrepresented minority (Black or African American, Hispanic or Latinx,
Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander,
or two or more races or ethnicities) or as LGBTQ+
If a company does not satisfy both criteria, the company
must specify the particular aspect(s) of board diversity it fails to satisfy or
explain why it does not have two diverse directors
Nasdaq’s rule supports shareholders’ call for board
diversity, as it shows movement toward governance best practices. Mercy
Investment Services submitted comments to the Securities and Exchange
Commission in support of the rule. Although viewed as a good first step,
shareholders believe the rule forces minorities and women to compete for board
roles and excludes LGBTQ+ persons from underrepresented populations. Mercy
Investment Services will continue to educate and raise awareness of comprehensive
board diversity issues both through company engagements and participation in the
Thirty Percent Coalition’s work.