Republicans Wussed Out Hard (Finance Friday) – by Christian Whiton – Super Macro by Christian Whiton
The SEC issued an 82-page rule approving Nasdaq s plan to require listed companies to have at least two diverse members of boards of directors. The rule helpfully explains:
Diverse would be defined to mean an individual who self-identifies in one or more of the following categories: (i) Female, (ii) Underrepresented Minority, or (iii) LGBTQ& Female would be defined to mean an individual who self-identifies her gender as a woman, without regard to the individual s designated sex at birth; Underrepresented Minority would be defined to mean an individual who self-identifies as one or more of the following: Black or African American, Hispanic or Latinx& and so on.
Thus is a government agency that is supposed to keep the securities business honest allowing an exchange that is supposed to have little to do with how listed companies are managed require those companies to choose board members based on characteristics other than merit. Companies can opt out, but they have to explain their transgression in writing if they do so, and we know how brave today s CEOs are about stuff like that. We wonder why any companies go public in the United States anymore, especially with so many debt and private equity alternatives to satisfy capital needs.
Two companies that certainly have diverse boards are Exxon and Philip Morris. Perhaps inspired by a Dutch court s order to Shell to commit suicide, Exxon, which sells nothing but hydrocarbons, is reportedly flirting with promising to go carbon neutral by 2050. Not to be outdone, the CEO of Philip Morris, which produces nothing but smoking products, said, I want to allow this company to leave smoking behind, and vowed to stop tobacco sales in Britain within ten years. The companies have a combined $200 billion in revenue, although maybe not for long. Can they make that up by selling cappuccinos?