Dec 9, 2020


Nasdaq Inc. filed a proposal that aims to require listed companies to include women and people of diverse racial identities or sexual orientation on their boards.  The goal of the proposal is to provide stakeholders with a better understanding of the company’s current board composition and enhance investor confidence that all listed companies are considering diversity in the context of selecting directors.  Nasdaq determined that over the past six months, more than three-quarters of its listed companies would have fallen short of the proposed requirements. 



If approved by the U.S. Securities and Exchange Commission (SEC), the new listing will require listed companies to have at least one female board member, plus one board member from an underrepresented minority or LGBTQ+.  Foreign companies and smaller companies could meet the requirement with two female directors.  Companies who do not meet the standard would be required to explain their rationale for not meeting that objective. 



As part of its rationale for the new requirement, Nasdaq’s proposal presents an analysis of over two dozen studies that found an association between diverse boards and better financial performance and corporate governance.  Under the proposal, all listed companies will be required to publicly disclose board-level diversity statistics within one year of the SEC’s approval of the listing rule.  Specifically, all companies will be expected to have one diverse director within two years of the SEC’s approval and two diverse directors within four or five years.



It is.  California passed a law this year requiring publicly traded corporations headquartered in California to appoint directors from underrepresented communities to their board by the end of 2021.  In 2022, boards with four to nine people must have at least two members from an underrepresented community and boards with nine or more people must have at least three.  Companies that don’t comply could face stiff fines.  Previously, California passed a 2018 law requiring corporations to add women to boards but nearly 78% of women appointed to these boards were white.



Nasdaq has more than 3,000 companies listed on its exchange and is the first exchange to call for the implementation of diversity requirements.  Nasdaq President and CEO Adena Friedman stated they are taking the leadership position because there has been so little action on this front.  We’ll let you know if the SEC approves this proposal.




Congress is rushing to pass a proposed COVID-19 relief bill as 12 million Americans are set to lose their unemployment benefits the day after Christmas.  Eviction moratoriums for renters and protections for student borrowers are set to expire, as well as a federal program for paid family leave.  Money for state and local governments, liability protections for businesses, schools, and universities as well as stimulus checks are all points of contention for the $916 billion proposal. 



Last week the U.S. Supreme Court sided with a California church challenging Gov. Gavin Newsom’s restriction on indoor worship services amid a spike in COVID-19 infections.  The court ordered the federal district court to revisit an earlier ruling against the religious institution that upheld Newsom’s restrictions.  This was a similar challenge to New York Gov. Andrew Cuomo’s restrictions on indoor worship services.  In that case, the court ruled limitations on religious institutions in coronavirus hotspots were unconstitutional.


Making Our Way Around the Country



The U.S. House voted Friday for the first time to federally decriminalize and levy a tax on marijuana sales and marks the first time Congress has ever voted on the issue.  The MORE Act would also erase non-violent federal marijuana convictions.  Although it will not pass the Senate, it can be a different story next year if the Georgia double Senate run-offs flip to democrats and take control of the Senate next year.  Meanwhile, the four states that voted to legalize recreational marijuana are working to implement legal sales.  New Jersey, Arizona, South Dakota, and Montana all have differing timeframes for when their laws take effect.  We’ll see how any federal laws next year might affect these states.



A New York federal judge fully reinstated the Deferred Action for Childhood Arrivals (DACA) program and ordered the Department of Homeland Security (DHS) to post public notice on its website to accept first-time applications, renewal requests, and advance parole requests and ensure that work permits are valid for two years.  It’s estimated that 1.3 million people became eligible to meet the criteria to apply in the last three years.  A group of prominent business leaders this summer urged President Trump to leave the program saying it would disrupt the economy and impact the battle against the coronavirus.



It just seems like this holiday season we need positive stories more than ever to brighten our spirits.  As we see our friends and colleagues light candles this year and brightening our hearts, we wish them a Happy Hanukkah!


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