When you think about the role of a stock exchange, championing diversity and inclusion (D&I) may not be the first thing that comes to mind. However, moves made by Nasdaq in the US have been welcomed as it is hoped this will be the nudge the corporate market needs to accelerate the pace of change in terms of gender diversity.
At the end of last year, Nasdaq proposed a rule that would require companies listed on the exchange to include on their board of directors one woman and one member of an ‘underrepresented’ ethnic minority or LGBTQ+ group. Smaller companies and foreign companies on the exchange could comply with two female directors. Meanwhile, in the UK, the Financial Conduct Authority has now also said it will consider whether to introduce diversity requirements for public companies.
“It is an interesting development,” according to Clare Payn, senior global ESG and diversity manager at Legal & General Investment Management (LGIM). She says asset managers and investors have played a part in pushing diversity higher up the agenda by using their shareholder votes to encourage boards to appoint more diverse directors, but the pace of change has been frustratingly slow.
“The Nasdaq announcement has come from a groundswell in opinion. It is a key issue for the industry, and it will cause companies to move quicker in terms of diversity on boards,” she adds.
Read the full feature in the March issue of ESG Clarity‘s digital magazine.
