BabyBoomer50s
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The exchange had set diversity targets for listed companies and sought to require them to disclose the gender and racial makeup of their boards
A federal appeals court rejected Nasdaq’s yearslong push to set racial and gender targets for the boards of its listed companies, dealing a major blow to one of most prominent efforts to promote diversity in corporate America.
The New Orleans-based Fifth U.S. Circuit Court of Appeals ruled Wednesday that the Securities and Exchange Commission had erred in 2021 when it approved two Nasdaq listing rules focused on boardroom diversity.
The court’s decision followed a broad backlash against what conservatives dub “woke” policies in the political and corporate worlds, such as affirmative action in hiring and ESG—investing based on environmental, social and corporate-governance factors. Companies that had earlier embraced such policies have since quietly retreated from them.
Nasdaq’s diversity rules had put it at the forefront of ESG. One rule required Nasdaq-listed companies to disclose statistics about the gender and racial makeup of their boards. The other rule—which was being phased in over several years—required companies to meet certain minimum targets for diversity, or explain in writing why they hadn’t done so.
For most U.S. companies, the ultimate target at the end of the phase-in period was for boards to have one female director and one director who identifies as a racial minority or as lesbian, gay, bisexual, transgender or queer.
In its ruling, the Fifth Circuit sided with two conservative groups that sued the SEC for approving Nasdaq’s proposed diversity rules in 2021. The groups argued that Nasdaq’s diversity targets amounted to an unlawful quota. They sued the SEC in its capacity as the stock exchange’s regulator.
https://www.wsj.com/finance/stocks/...eb7ee?st=x7UVic&reflink=article_copyURL_share
