Wall Street has always hated Main Street. Never before, however, has it been so open and brazen in wielding that animus. Take, for example, Nasdaq’s recent pronouncement that it plans to delist any company from its exchange that won’t appoint board members based on how they look, whether they have sex with the “right” people, or identify as a letter in the LGBT lexicon.
Nasdaq’s dictate is wholly unconstitutional, panders to minority groups and women, and would financially strain many American businesses. Still, it’s pushing forward anyway because it thinks no one will have the courage to stand up and stop it.
Specifically, Nasdaq is seeking permission from the U.S. Securities and Exchange Commission (SEC) to delist any American company from its platform unless the company puts two “diverse” individuals on its board of directors. One position must be given to a female. And one position must be given to a racial minority or a member of the ever-broadening definition of LGBT.
This is the definition of racism and sexism, which are illegal in U.S. employment, but it’s also the state of play in corporate America: Follow the leftist political directives of the Wall Street and Davos crowds, or lose the ability to finance your business in the public marketplace. Where can we begin to unpack this wholly backward plan, and how did we get here?
For starters, this scheme has precisely nothing to do with financial performance. In its petition to the SEC, Nasdaq doesn’t claim minority or female board membership leads to increased corporate performance. It simply cites debunked studies claiming that such board diversity is “positively associated” with better financial performance. This confuses causation with correlation, a logical fallacy known as post hoc ergo propter hoc (“after this, therefore because of this”).
Nowhere does Nasdaq say that financial performance improves because a company increased the surface-characteristic diversity of its board, only that in some cases, financial performance improved after a diverse board member was added. You could just as easily conduct a “study” showing that companies that instituted Pizza Fridays or Ice Cream Wednesdays saw improved financial performance after the fact. For such a study to have any validity, it must show that the first action caused the subsequent result. In short, Nasdaq failed to prove its work.
Yet it gets worse. Another likely illegal aspect of Nasdaq’s plan is that a company can bypass the minority requirement by appointing to its board a white male who identifies as LGBT. It is entirely against the law, however, to ask any job applicant for his or her sexual orientation.
So, if a company complies with Nasdaq’s demands, and ends up with a board comprised of one female and the rest all white males, the company just potentially (and publicly) outed one of those men LGBT. Surely not every single member of those groups wants that information made public.
Let’s be clear-eyed about what Nasdaq is doing, beyond expressing its ideological commitment to identity politics. It is trying to set up a system similar to tenure for professors in higher education. Whatever its possible noble origins and designs to protect academic freedom, tenure has become nothing more than a means to blackball conservative academics from college campuses.
The left has been so successful at blocking conservative thought in academia that, according to the National Association of Scholars, “faculty political affiliations at 39 percent of the top-tier liberal arts colleges … are Republican free — having zero Republicans … and 78.2 percent of the academic departments … have either zero Republicans or so few as to make no difference.” This is exactly what is already occurring in corporate boardrooms and what Nasdaq is trying to accelerate.
A 2019 survey conducted by Barron Public Affairs compared the ideological makeup of the board members of the Fortune 100 companies with any prior political experience. In the Fortune 1-10, the split was 100 percent Democrat and 0 percent Republican.
Among the financial companies in the Fortune 1-100, the split was 83 percent Democrat and 17 percent Republican. Nasdaq is trying to fast-track the left’s complete takeover of corporate America by ensuring that board seats are now rewarded to leftists — thereby keeping any businessmen with conservative or traditional values out of the club.
Because in today’s environment no CEO would dare challenge the liberal mob, Nasdaq expects its request will go unchallenged. Therefore, it’s up to the Americans who prioritize business success over virtue signaling to do something about it.
And you can. The SEC is accepting public comments regarding Nasdaq’s request until January 4, 2021. We at the Free Enterprise Project just submitted our comment blasting Nasdaq’s gambit. You can submit your comment here. Don’t let the mob win.