In an op-ed recently published in RealClearMarkets, “Why Choice and Merits Are Better Than Board Mandates,” Philanthropy Roundtable Adjunct Senior Fellow Patrice Onwuka says SEC-issued rules requiring race, gender and sexual orientation disclosure mandates on corporate boards for companies on the Nasdaq stock exchange are discriminatory. In light of the upcoming rehearing of the New Civil Liberties Alliance’s National Center for Public Policy Research v. SEC lawsuit challenging these SEC-issued “Board Diversity Rules,” Onwuka explains how these mandates fail to deliver their intended results. She also discusses why women’s personal choice and merit are better for women’s advancement on board positions than diversity mandates.
Below are excerpts from the article entitled “Why Choice and Merits Are Better Than Board Mandates”:
“Gender board disclosure mandates like the one attempted by SEC may be well-intentioned, but they fail to deliver on intended outcomes. Advocates of greater board diversity commonly argue it improves a firm’s financial performance. The data are less certain. Plus, these mandates ignore the gains women have made over the past 40 years.”
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“Proponents also attempt to justify gender board rules on the grounds that increasing female board representation will lead to better outcomes for all women, especially younger women. Unfortunately, evidence doesn’t support that claim either. The presence of one female board member has led some companies to feel the gender diversity box is checked, and no other women are needed, undermining the goal of seating the most qualified individuals.”
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“The reality is the shift is happening without destructive mandates. Over my lifetime women have seen tremendous growth in executive roles and on corporate boards. Women run over 10% of the nation’s Fortune 500 companies. They comprise 46% of new independent directors of S&P 500 boards–up 92% in 10 years. Last year, a third of all S&P 500 board directors were women.
“The steady rise of women in leadership shows companies and organizations recognize more and more the value of merit. As individuals, women bring a wealth of knowledge, expertise, experience and connections that can improve corporate performance. The problem arises when the selection of women for such positions becomes a check-the-box exercise to meet arbitrary mandates.”
To read the complete article, please visit RealClearMarkets.
