THE DIVERSITY POLICE RAID THE BOARDROOM
The Far Left’s agenda to weaken our country is now poised to strike our corporate boardrooms. Assuring lackluster performance of our corporations would be the result if more emphasis is put on gender, race and ethnicity of corporate board members rather than their expertise and success in their particular fields. You have got to give the Far Left credit, they are diabolically clever at what they are pushing for ! I suspect Trump will put a stop to their agenda !!! NancyTHE WALL STREET JOURNALThe Diversity Police Raid the Boardroom
Forcing firms to disclose the race and gender of their directors is a step toward de facto quotas.
EXCERPT FROM THIS ARTICLE:
Activists such as Aaron Dhir, a professor at York University’s Osgood Hall Law School in Toronto, have urged that companies be compelled to consider “the socio-demographic composition of their boards”—that is, directors’ sex and ethnicities, not their diversity of experience. At the very least, firms could be forced to explain why they refuse to enforce quotas in the boardroom. These aren’t only the ideas of an obscure professor. Rep. Carolyn Maloney (D., N.Y.) has been pressuring the SEC to force companies to identify “each board nominee’s gender, race, and ethnicity.”……..The professor’s radical views are matched at the highest levels of the Obama administration. The White House’s relentless drive to redefine America as a kaleidoscope of groups, rather than one united nation, is about to invade the corporate board room. Warren Buffett, call your office. Or, better yet, try your friends in the Oval Office.
Berkshire Hathaway, the profitable holding company run by theObama-supporting investment guru Warren Buffett, has for a few years included an interesting nugget about diversity in its proxy disclosures:
“Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the Company.”
This refreshingly direct disclosure complies with a 2009 Securities and Exchange Commission requirement that companies disclose any plans regarding board diversity. Yet the SEC is no longer impressed. The regulatory agency is now threatening to mandate much stricter diversity disclosures—which would allow activists to intimidate firms into forced affirmative-action programs.
“Companies’ disclosures on board diversity in reporting under our current requirements have generally been vague and have changed little since the rule was adopted,” SEC Chairman Mary Jo Whitecomplained in June. “Very few companies have disclosed a formal diversity policy.”
Ms. White then suggested the SEC would propose a new rule requiring companies “to include in their proxy statements more meaningful board diversity disclosures on their board members and nominees.” She also left the door open to having the rule specifically define what diversity means. These developments should trouble businesses that simply want to hire the best people.
Activists such as Aaron Dhir, a professor at York University’s Osgood Hall Law School in Toronto, have urged that companies be compelled to consider “the socio-demographic composition of their boards”—that is, directors’ sex and ethnicities, not their diversity of experience. At the very least, firms could be forced to explain why they refuse to enforce quotas in the boardroom. These aren’t only the ideas of an obscure professor. Rep. Carolyn Maloney (D., N.Y.) has been pressuring the SEC to force companies to identify “each board nominee’s gender, race, and ethnicity.”
Investors are not clamoring for politically motivated disclosure requirements on the theory that forced diversity improves performance, if they seek the requirements at all. Berkshire—which chooses directors by integrity, business savvy and interest in the company—has enjoyed good governance without diversity initiatives. The company currently tracks the S&P 500 average and outperforms its industry. On revenues of $200 billion, it has become the fourth-largest company on the S&P 500 list, behind Wal-Mart,Exxon Mobil and Apple.
But this push isn’t about performance. Rather, its proponents want to open a new front in the campaign to have government allocate participation in society for groups it designates as protected classes. Mr. Dhir, Rep. Maloney and the others want these disclosures so activists can use them to intimidate companies.
Chairman White made this point in 2013 when fending off an effort by Sens. Charles Schumer (D., N.Y.) and Harry Reid (D., Nev.) to have the SEC require companies to disclose what they spent on political campaigns. Such mandates, she said at the time, “seem more directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information.” Her comments came up again last year when she fended off a similar effort by 40 Democratic senators.
Alas, this time Ms. White seems to be caving, though the same logic holds. Mandating onerous, politically motivated diversity disclosures will reduce return on shareholder investment by crowding out information that does help evaluate a company’s performance.
“The corporation is a place of significant power in today’s world,” Mr. Dhir argued in a blog post last year. “Many companies have nearly as much influence over economic and social relations as government, and women and members of racial and ethnic minority groups ought to be a part of their leadership structures.” He called Berkshire’s disclosure “insolent” and lamented that its actions are “perfectly permissible” under the law.
Rep. Maloney, using her position as ranking member of the House Subcommittee on Capital Markets, had the Government Accountability Office draw up a report on corporate boards. The report, which appeared last year, cited research showing that “the broader range of perspectives represented in diverse groups require individuals to work harder to come to a consensus, which can lead to better decisions.”
But only perspectives based on ethnicity or sex need apply. Take Ford Motor Co., which defines diversity as a range of “experience in business, government, education and technology, and in areas that are relevant to the Company’s global activities.” To Mr. Dhir, this is unacceptable: “Many commentators who supported the SEC’s original rule proposal made it clear that they were concerned with ‘diversity’ along gender and racial lines.”
The professor’s radical views are matched at the highest levels of the Obama administration. The White House’s relentless drive to redefine America as a kaleidoscope of groups, rather than one united nation, is about to invade the corporate board room. Warren Buffett, call your office. Or, better yet, try your friends in the Oval Office.
Mr. Gonzalez, a former speechwriter for SEC Chairman Christopher Cox (2005-06), is a senior fellow at the Heritage Foundation.
