There are three little problems with this idea from NASDAQ.
The Securities and Exchange Commission on Friday approved a Nasdaq proposal that could make company boards — and, by extension, the companies themselves — more diverse. The rule requires companies listed on its exchange to report their board diversity and have on their board — or at least explain why they don’t have — at least one person who identifies as a woman and one person who identifies as an underrepresented minority or LGBTQ person.
The first is that it doesn’t pass the logical sniff test. Why is diversity on corporate boards to be welcomed? The answer is because research has shown that diversity increases the success of the company. At which point excellent, great. So, those companies that are diverse will outperform those that are not and nothing else need be done. For we are in a capitalist and market economy and therefore ew already have a mechanism that deals with such issues.
The only reason why this wouldn’t work is because diversity doesn’t in fact make a difference to the performance of the company. At which point why in the Hell are we doing this anyway? Well, you know, unless the performance issue is just an excuse.
The second is that this has been tried. Norway did it for women on boards. Insisted on something close to gender equality. The result has been a compression, not expansion, of diversity. As there are now some half dozen women on 50 boards each – I exaggerate but not much – meaning that whatever the failings of those individuals, and we’ve all got one or more of those, are now more widely applied.
The third is that specific reference to LGBTQ. Gay is about 2% of the male population. lesbian about 1% of female. Bi-= is a bit of an unknown but somewhere in those regions. T is vanishingly small and Q is just another way of expressing the same ideas anyway.
So, on a 10 person board what’s the correct proportion of LGBTQ? That Jim has to be gay on Tuesdays presumably. Maybe he can just not make love to his wife that day and claim the A of LGBTQIA?
Or, you know, we can leave people to work out the management of their own assets, their own property, as they wish? This rather being what the capitalist and free market idea is all about.