Financial companies run by women are a rare species. 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 venue. Again and again there are allegations against some top managers that they do not stand up enough for other women because their own success has made them unsolid. Friedman definitely can’t be blamed for that.
For some time now, the 52-year-old has come back to the Forbes-List of Most Powerful Women gets busy pushing through what should be a breakthrough for women and minority people: it introduces a new policy requiring most of the nearly 3,000 companies listed on the Nasdaq at least a woman in hers Management Board a person who is not white or who identifies as gay, lesbian, bisexual, transgender or queer should be added. Management boards are a mixture of the management board and supervisory board customary in German companies. If that board is not diverse, the Nasdaq will force companies in future to justify in writing why not – that should cause embarrassing PR. In addition, companies must publish statistics on the demographic composition of their management team. After much debate, the US Securities and Exchange Commission (SEC) has just approved the new directive.
A compulsion, and a very mild one at that, can’t do any harm to keep tech companies ahead
Behind the rule is not so much female solidarity, but above all economic logic, said Nasdaq boss Friedman in a recent interview: “There is increasing evidence that diversity in the Boards correlated with better results in two areas: risk control – this is important to us because investor protection is crucial for us – and economic success. “
Many tech and digital companies are not bothered by the new directive. Representatives from Microsoft and Facebook, for example, have expressly spoken out in favor of them. The American digital economy is still dominated by men, especially white men, but at least most digital companies publicly vow their will to get better. And the US economy as a whole is doing significantly better than the German economy. According to a recent study, the number of women in the Boards of Fortune 500 companies rose by four percentage points to 26.5 percent over two years. In Germany, the proportion of women on the executive boards of 186 companies listed on the stock exchange and on the regulated market is 13 percent.
Digital companies should take a leadership role when it comes to diversity in top 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 a very mild one, from the Nasdaq can do no harm. The pressure on companies from outside is increasing anyway, especially from the donors. The big three financial investors, Vanguard, Blackrock and State Street, no longer want companies they give money to get away with if they only have white men in key executive jobs. And Goldman Sachs announced at the beginning of 2020 that it no longer wanted to go public with only male-led companies.
Although the trend towards more diversity is clear, conservative politicians and activists accuse the Nasdaq that the new regulation is itself racist or sexist because it forces companies to make decisions based on gender or skin color. Lawsuits are threatened. However, it is unlikely that they will be successful, after all the consequences are rather mild if companies do not meet the requirements of the tech exchange: After all, they are not excluded from trading, they just have to explain themselves. 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. “Whenever you try to make changes, there will be discussions.”