Financial firms run by women are a rare breed. One of these rare creatures is the Nasdaq. Adena Friedman has been the head of the New York Stock Exchange for technology companies since 2017, when she was the first woman to head a global trading platform. Time and time again there are allegations against some senior executives that they do not stand up for other women enough because their own success has made them unstable. Friedman certainly cannot be blamed for this.
For some time now, the 52-year-old, who is repeatedly on Forbes’ Most Powerful Women List, has been working to push forward something that should mean a breakthrough for women and those belonging to minorities: it introduces a new policy, which requires that most of the roughly 3,000 companies listed on the Nasdaq have at least one woman on their board of directors, as well as someone who is not white or who identifies as gay, lesbian , bisexual, transgender or queer. Boards of directors are a mixture of the board of directors and the supervisory board customary in German companies. If the board is not diverse, the Nasdaq will force companies in the future to justify in writing why not – that should cause embarrassing public relations. In addition, companies must publish statistics on the demographic makeup of their management team. After long debates, the US Securities and Exchange Commission (SEC) has just approved the new directive.
One constraint, and a very slight one, can’t hurt to keep tech companies moving forward
The rule is not so much female solidarity as it is economic logic, Nasdaq chief Friedman said in a recent interview: “There is growing evidence that board diversity is correlated. with better results in two areas: is crucial for us – and economic success. “
Many tech and digital companies are not hampered by the new directive. Representatives from Microsoft and Facebook, for example, have spoken out expressly in their favor. America’s digital economy is still dominated by men, especially white men, but at least most digital businesses are publicly committed to improving themselves. And the US economy as a whole is doing significantly better than the German economy. According to a recent study, the number of women on the boards of Fortune 500 companies has increased by four percentage points to 26.5% in two years. In Germany, the proportion of women on the boards of 186 listed companies and on the regulated market is 13%.
Digital companies need to take a leadership role in diversity within senior management. In any case, given the shortage of skilled workers, they cannot afford to have only white and male employees and managers. A little coercion, albeit very slight, from the Nasdaq can’t hurt. The pressure on outside companies is increasing anyway, especially from donors. The Big Three financial investors, Vanguard, Blackrock and State Street, no longer want companies they give money to to get by if they only have white men in key leadership positions. And Goldman Sachs announced in early 2020 that it no longer wanted to go public with only male-run companies.
While the trend towards more diversity is clear, conservative politicians and activists accuse the Nasdaq that the new regulations are itself racist or sexist because it forces companies to make decisions based on gender or skin color. . Prosecutions are threatened. However, they are unlikely to be successful, as the consequences are rather slight if companies do not meet the demands of the tech exchange: after all, they are not excluded from trading, they just need to be explained. Basically, it’s all about transparency – and US courts rarely have anything to object to. Nasdaq boss Friedman is not deterred by the attacks anyway. “Every time you try to make changes, there will be discussions.”