NASDAQ announced this week that it will require companies listed on its exchange to maintain a board of directors with at least one woman and one minority. Firms that do not comply could be delisted.
The requirement could be a large step forward for diversity however questions quickly arose about the exact definition of a minority. Do only racial minorities count towards this requirement? After hundreds of panicked questions from old white men running many of America’s largest tech companies, NASDAQ hired consulting firm McKinsey & Company to determine the exact definition of a minority.
The contract with McKinsey is said to be worth more than $100 million, with additional incentive bonuses for every possible type of minority that McKinsey can include in its definition. Many companies have already contacted McKinsey to lobby for Ferrari drivers (0.2% of the population) to be designated as minorities. Others have suggested that minority classes should include country club members, rare whiskey collectors, and Harvard Business School graduates.
NASDAQ is unlikely to announce their exact criteria until next year, but many companies have already begun taking steps to increase diversity. Marty Smith, CEO of enterprise software company Transform Technologies, Inc, took the courageous step of adding his wife and two daughters to his company’s board of directors.
“It feels great to contribute to gender inclusion,” Smith said. “The board had way too many males, with three of my sons and two of my brothers already holding seats.”
Other companies have already started to seek out minority candidates. Jeff Riskin, Founder, President and CEO/CFO of microcap firm ThinkNow, is hoping to diversify his board.
“We have reached out to Tiger Woods and Oprah about taking a board seat, but have not yet heard back” said Riskin, whose firm has a $4.7 million market capitalization and net losses for every year since 1997.