Why Do Investors Have August 8 Circled on Their Calendars?

This year, many institutional investors have a big red circle marked on August 8. But why? Is it a reminder to watch Rain Man destroy the blackjack tables, in honor of Dustin Hoffman’s birthday? Or a chance to contemplate the anniversary of Richard Nixon’s resignation, or a chance to stream some U2 on the Edge’s birthday? All are possible, but more likely, it’s a reminder of the deadline for Nasdaq listed companies to disclose their initial board diversity matrix (unless they file their 2022 proxy later this year, in which case the matrix must be included there).

All Nasdaq companies need to comply, but there are slightly more stringent requirements for the 2,900+ companies that are based in the U.S. To get a sense about whether these companies are ready for August 8, we analyzed all 142 Nasdaq-listed companies that are currently in the S&P 500. Here’s what our data shows:

  • 88 of 142 Nasdaq-listed companies (62.0%) have reported their matrix.
  • 29 more (20.4%) have reported it without LGBTQ+ data. That said, Nasdaq’s guidance says “a company may choose to exclude categories that are not applicable to its directors.” This seems to indicate you can comply without filling out the LGBTQ+ line.
  • If you consider all of the companies above in compliance, 82.4% have already met the deadline.
  • 17 companies (12%) have proxies coming out later in 2022
  • Eight (5.6%) have not yet published information in line with requirements

As a reminder, this rule, which was proposed by Nasdaq and approved by the SEC in 2021, requires companies to “show or tell,” meaning they must have at least one self-identified female and at least one underrepresented minority or LGBTQ individual – or explain why they don’t.

Proponents (85% of SEC comments were in favor of the proposal) say the rule encourages the creation of more diverse boards, but others, including Richard Morrison of the libertarian Competitive Enterprise Institute, and “the scourge of affirmative action” Edward Blum, call it unfair. 

In its SEC comments, Blum’s Alliance for Fair Board Recruitment said the rule relies on arbitrary classifications and distinctions, contradicts SEC rules, and runs contrary to settled principles of federal anti-discrimination law. Blum, who most recently fought against California’s two progressive board diversity laws, subsequently challenged the rule in Louisiana federal court, with the support of 17 states who call the rule “crude and odious.” Others in the “no” camp include NYSE president Stacy Cunningham, who has frequently dismissed the utility of diversity quotas, in favor of other methods of encouraging diversity (forward to 5:50 for Stacy’s comments). 

As Richard Hughes, the dean of New York TV editorialists used to say, “What’s your opinion? We’d like to know.” 

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