Nasdaq's new diversity rules aren't enough

Today is also an important deadline for all companies listed on the Nasdaq, so it’s good to see those numbers finally rising. Companies should complete a board diversity matrix that includes the total number of board members and how those board members self-identify in terms of gender. Race, ethnicity, LGBTQ+ status. The results will be published in the annual meeting proxy statement or on the company’s website.

Companies traded on exchanges after August 2023 At least two diverse directors are required. Or you should explain why you are not achieving this diversity objective.

URL Media founder and CEO S. Mitra Kalita, a former CNN executive, wrote in a recent op-ed on importance: Board diversity.

“By disclosing this information to investors, shareholders will be able to support companies that embody their ideals and attract investment from companies that do not,” said the chairman of the House Oversight and Reform Committee. Serving New York Democrat Rep. Carolyn Maloney said in a statement: movement. “In addition to creating morality and common sense, increased diversity also makes economic sense. Research repeatedly shows that companies with more diverse leadership are better positioned to succeed. ”

The killing of George Floyd by Minneapolis police in 2020 sparked Black Lives Matter protests across the country, but it also raised calls for business action on diversity and inclusion, said ISS Governance Solutions thought leadership director. One Fasil Michael said:

The numbers show that these demands are being taken seriously. But the numbers don’t tell the whole story.

For example, we identify 19% of the total US population as Hispanic or Latino, yet directors from that group occupy only 5% of the S&P 500 board seats.

“Many boards still fail to reflect the diversity of their customer base and the demographics of the wider society in which they operate,” Michael wrote. “While there is reason to celebrate progress in recent years, many companies are expected to address board diversity issues alongside management diversity, employee equity and fair compensation. The long-term trajectory of many companies’ diversity and inclusion initiatives is yet to be seen.”

It’s not just about boards. A new McKinsey study found that about 75% of black and Hispanic employees perform frontline tasks such as waiting tables, stocking store shelves, and folding clothes, compared to 58% of white employees. It turns out that I am engaged in work. And three of his four of these employees want a promotion, while only one in four of hers get promoted. Black workers make up 17% of hourly wage jobs in large companies, but only 9% of low-level supervisory jobs, and one is up the ladder.

Additionally, according to McKinsey, frontline hourly employees are nearly 20% less likely than corporate employees to believe that diversity and inclusion policies make a difference.

Large companies have been enthusiastically embracing ESG incentives lately, write Alison Taylor, professor and executive director of the Ethics Systems Program at New York University’s Stern School of Business, and Brian Harward, the program’s principal investigator. .

But much of what they are doing “appears to be a selfish strategy to generate positive PR,” they wrote in a joint statement. , “It’s disappointing but understandable… Investors are putting pressure on companies, ticking boxes, and giving them the equivalent of a virtue movement — and it shows.”

took McDonald’s (MCD), for example. The company announced last year that it would tie her 15% of executive compensation to achieving an annual increase in the proportion of women and minorities in senior management.

How nice. At the same time, however, McDonald’s is criticizing black franchises for abusing his owners, “red-lining” them, driving them to the most disadvantaged locations requiring costly and impractical renovations, and rating and inspecting stores. was accused of tightening

“What prompted that behavior?” ask Taylor and Harward. “Was there any connection between the lack of diversity in senior management and this lawsuit? Should I be given a bonus?”

The company denied wrongdoing and settled claims that it had been treating black franchisees unfavorably.

bad news for wall street

It doesn’t last forever, so enjoy your time while you can.

Last year was a lucrative year for black fleece vest wearers working in Midtown Manhattan, known as Wall Street. The streets were glistening with the 2021 version of gold… mergers, acquisitions, IPOs.

The economy is back, baby. Thanks to the hard work of Pfizer, Moderna and Johnson & Johnson, Covid has finally met its match. Wall Street warriors worked hard and their salaries reflected that. The average bonus reached a record $257,500, up 20% from the previous year. That’s in addition to a very generous base salary.

And 2022 hits.

Covid rates are still at record highs and shutdowns are disrupting supply chains. Inflation, interest rates and a lack of IPOs are hitting the financial industry hard. M&A activity has fallen by 25%, and IPOs have halved since last year. JPMorgan Chase’s investment banking revenues were down 61% in the previous quarter and Morgan Stanley’s were down 55%.

Year-end bonuses are now expected to be significantly reduced. A person working in the financial industry can expect her compensation to drop by nearly 50%, reports Alison Morrow, her CNN business colleague of mine. Please check this out for details.

inflation, hot new word

We all know that historically high levels of inflation have taken a toll on our wallets. This earnings season shows that companies are noticing, too.

New data from Cision shows a 26% increase in mentions of “inflation” in public company earnings calls this quarter.

That carried over to Twitter, where “inflation” was mentioned 19,518 times, compared to 827 in the same period in 2021. Interestingly, “corporate greed” was also a popular phrase among Twitter users talking about the earnings call, with 9,577 mentions. compared to just eight in 2021.

Firms increased references to ‘interest rates’ and ‘recession’ in their earnings reports this quarter by 9% and 4%, respectively.

However, Russia’s invasion of Ukraine, seen as a major headwind last quarter, saw a 77% drop in negative mentions this quarter and a 17% drop in pandemic talk.

next

Tyson Foods and Palantir Technologies report earnings before the US market opens.

Also today: The NY Fed’s 3-year inflation expectations have been released.

Tomorrow: Sysco, Coinbase and Hyatt will report earnings.

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