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Culture War Roundup for the week of February 13, 2023

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Checking the text it does say companies that choose not to comply will have to say why. There don't appear to be any official punishments for picking that option. "The Exchange would not evaluate the substance or merits of a companies explanation" seems to support that.

But then Blackrock has ESG/DEI guidelines.

BlackRock Is Sick of Excuses for Corporate Boards Lacking Women

BlackRock Inc. isn’t buying excuses from companies that say they can’t find women to fill diverse slots on boards.

The world’s biggest asset manager earlier this year sent letters to companies in the Russell 1000 index with fewer than two women on their boards, asking them to explain their lack of progress. Some of the responses were surprising, said Michelle Edkins, the firm’s global head of stewardship.

“On board diversity, frankly some of the answers we got were from the 1880s,” Edkins said Friday in an interview at the SRI Conference in Colorado Springs, Colorado. Among the most frustrating responses: “There aren’t any qualified women,” “We don’t need a woman director” and “We’re not a consumer-facing company.”

But BlackRock, whose research shows that more diverse boards get better results, sees a wide pipeline of female directors available. Edkins said the New York-based fund giant, which has five women on its 18-member board, wants companies to look for directors in more uncommon places.

“Every man was a first-time director once,” she said. “If someone took a bet on an untrained director who happened to be a man, you can take a bet on an untrained director who happens to be a woman.”

From one side or another, at an earlier or later point of your business development, if not from Nasdaq then from Blackrock or Goldman Sachs or silent or not-so-silent conspiracy of antagonistic HR managers whom you cannot replace with loyal ones, you will start to feel pressure mounting and compelling you to actually make costly decisions.

Right if enough investors are on board, then it's a problem. But the change of rules is then downstream of that. It's a symptom, not a cause. If the Exchange is correct that this is information the investors want then the Exchange should probably facilitate that.

Though I'll note some of the companies did reply "We don't need a woman director" and the "punishment" presumably will be Blackrock not investing in them. Which I am fine with, you can choose to invest or not invest for whatever reason you want. Maybe someone will choose to invest because the company said that, and if not well that is something companies should have to take into account.

If Blackrock were asking Why don't you have 2 evangelical directors, I think that is fine too. They should be largely free to make their investment decisions as they like. If they make bad choices they'll presumably lose money (or if they are right and diverse companies make more they will be making those companies more profitable). Companies should be able to take moral stances, Hobby Lobby should be able to not fund contraception for their employees and Blackrock should be free to only invest in companies with a female director. Then I am free to decide to use Hobby Lobby or Blackrock based upon their choices or ignore them entirely and use some other criteria.