WASHINGTON, Jan. 14, 2021 /PRNewswire/ -- The Latino Corporate Directors Association (LCDA) submitted a comment letter in strong support of the Nasdaq Proposed Rule Change (a9SR-NASDAQ-2020-081) which would require Nasdaq-listed companies, subject to certain exceptions, to have at least one director who self-identifies as female, and at least one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+, or to explain why the company does not meet this requirement. The proposed change would require Nasdaq-listed companies to provide statistical information on the company's diversity on its board of directors.
The Latinx community is the fastest growing labor and consumer force in the United States.
"We support these rule changes because for too long SEC rules have permitted inadequate disclosure of directors' diversity backgrounds, despite investor demand for this kind of information," said Roel Campos, LCDA Chair and former Commissioner of the U.S. Securities and Exchange Commission (SEC). "This regulatory indifference has helped sustain the exclusion of American Latinos and other racial and ethnic minorities from boards and the C-suite, despite the existence of an adequate pipeline of qualified candidates. The gap between the labor force and executive representation is widest among Latinx than any other underrepresented group and it must end now."
Latinos are severely underrepresented among Fortune 500 and 1000 boards and other public companies, and often forgotten when assessing director diversity. Latinos make up nearly 18 percent of the US Population, but less than 2 percent of board seats on the 1,000 largest Nasdaq-listed companies based on revenue.
Nasdaq's diversity proposal comes at a time in our history when America's broad Latinx community is increasingly wielding significant importance, both in the economic and political sectors. Latinos are making substantial contributions to the American economy. They are poised to make up 20 percent of the entire American workforce in 5 years and 30 percent by 2050 and Latinos spend $2.6 trillion annually. If the US Latinx population were a country, their Gross Domestic Product market growth rate would be third highest among all global economies. In fact, from 2017 to 2018, studies found that had it not been for strong growth in the US Latinx market, the US economy could have experienced contraction.
LCDA also supports the new disclosure requirements in Nasdaq's diversity proposal. Current requirements make it difficult for investors to ascertain whether there are any Latinx board members. Investors need improved disclosures and transparency to gauge a company's commitment to the Latinx community and market. In addition, there is a fiduciary benefit to diverse C-Suites. A 2020 report from McKinsey found, "…a positive, statistically significant correlation between company financial outperformance and [board] diversity, on the dimensions of both gender and ethnicity." Notably, companies with significant gender diversity were, "…28% more likely than their peers to outperform financially."
"The Latinx community is the fastest growing labor and consumer force in the United States, yet severely underrepresented among Fortune 500 and 1000 boards and often forgotten when assessing director diversity," Campos added. "Nasdaq's Proposal will assist significantly in ensuring that diversity statistics are transparently disclosed and in providing extremely important information to inform all investors in their decision making. Additionally, for those corporations that seek to improve the quality of their board diversity with Latinx representation, the Nasdaq Proposal will assist in that goal being accomplished. We urge the SEC to approve this proposal."
ABOUT THE LATINO CORPORATE DIRECTOR'S ASSOCIATION
The Latino Corporate Directors Association (LCDA) is a national, membership organization promoting C-level and board diversity. Our organization champions diversity at the highest levels of corporate leadership behind a critical mission: increase the representation of US Latinos on corporate boards.
For more information: latinocorporatedirectors.org
Contact: Monique Navarro (915) 790-7788
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SOURCE Latino Corporate Directors Association