Diversity in the stock market, by force? – The Sun of Mexico

A US appeals court will review a controversial order from the Nasdaq index that requires publicly traded companies to diversify their boards of directors with women, people from ethnic minorities or from the LGTBQ+ community or in any case provide explanations for why they do not do so. do.

The Nasdaq began implementing the order partially at the end of fiscal 2023, more than two years after the securities regulator gave its approval and almost four years after the index proposed it, but many companies have the deadline in 2026. .

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Throughout this journey and until now, the Nasdaq rule has encountered opposition from conservative activists, led by jurist Edward Blum, who has denounced other cases of ‘positive discrimination’ in the United States, according to local media.

The Fifth Circuit Court of Appeals, in response to a petition led by Blum and another entity, ruled this week in favor of reviewing the stock market regulator’s approval of the rule in 2021, according to the economic media CNBC.

In addition to issuing the review, the court overturned a previous decision by a panel of lower court judges, which maintained the validity of the rule.

Unusually, all the judges of the court, which has a Republican majority, will review the case en banc, tentatively scheduled for May 13.

The Securities and Exchange Commission (SEC) gave the green light in 2021 for Nasdaq to require its listed companies to disclose the composition of their boards of directors and have at least two diverse members: one woman and another who identifies as an ethnic minority or part of the LGBTQ+ community.

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Listed companies that do not meet these quotas must provide explanations to Nasdaq.

Initially, failing to comply with the rule could lead to the listed company being removed from the index, but the Nasdaq seems to rule out that point in an explanatory document dated February 2023: it emphasizes that it is not a “mandate” and that it will not evaluate the “merits.” of the explanation” of those who do not meet the quotas.

2024-02-23 08:00:00
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