Why Board Diversity and the Nasdaq Rule Requiring It Make Sense

In December 2020, Nasdaq asked the Securities and Exchange Commission (SEC) to approve a new boardroom diversity rule.[1] The aim is for most Nasdaq-listed companies to have at least one director self-identifying as a woman and another self-identifying as an underrepresented minority or LGBTQ+.  The rule is not a requirement that listed firms have such (minimally) diverse boards, but instead is a requirement that firms either comply with this expectation or explain in their securities disclosure filings why they have not complied. Foreign companies and smaller companies will be given flexibility in satisfying this requirement with two women directors.… Read more

Halliburton II

The Supreme Court’s decision in Halliburton affirms a legal doctrine that for several decades has set the United States apart from most other countries.  Lawyers who claim to represent enormous numbers of investors, most of whom have never met the lawyers, are allowed to sue public companies for alleged misrepresentations of material facts even if a substantial number, perhaps most, of the plaintiff investors never heard or read, much less relied upon, the alleged misrepresentations.  When these class actions settle (almost all of them do settle rather than go to trial) damages are paid by the company to the plaintiff … Read more