NASDAQ, the tech-heavy stock exchange, is trying to implement very mild diversity requirements for boards of directors whose companies are listed on the exchange.
This is as pure an example of free enterprise in action as you can find. NASDAQ is a private entity taking these steps, not a government agency.
Once again, conservatives are showing their true colors as the true enemies of market freedom as they are fighting in court NASDAQ’s private-industry effort at building diversity:
Lawyers for conservative groups argued in federal court Monday that Nasdaq Inc.’s push to set diversity targets for listed companies amounts to an illegal racial and gender quota.
Two right-leaning groups sued the Securities and Exchange Commission last year, setting up a battle over the hot-button issue of corporate diversity and how far regulators can go to foster it. The groups sued the SEC because the agency approved Nasdaq’s listing rules, acting in its capacity as the stock exchange’s regulator.
“These rules impose unprecedented demographic quotas and disclosure requirements regarding race, sexual preference and sex on companies valued at over $20 trillion,” Peggy Little, a lawyer for the National Center for Public Policy Research, one of the two groups suing the SEC, argued in court.
Monday’s oral arguments in the New Orleans-based Fifth U.S. Circuit Court of Appeals marked the first time that the legality of Nasdaq’s listing rule has been debated in a courtroom.
Nasdaq’s rule consists of two key parts. One part, which took effect earlier this month, requires Nasdaq-listed companies to disclose the gender and ethnic makeup of their boards using a standardized template.
The other part, set to take effect in phases over the next few years, sets minimum diversity targets for company boards. For most U.S. companies, the ultimate target will be to have one female director and one director who self-identifies as a racial minority or as lesbian, gay, bisexual, transgender or queer. Companies that don’t meet the targets will need to explain in writing why they didn’t do so.