Privacy

Race and Gender Checks Coming to a Boardroom Near You

New York City pressures Wall Street banks to report "self-identified gender, race and/or ethnicity of individual directors."

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The Office of the New York City Comptroller was created in 1801 to be the chief auditor of local government and all its various financial activities. The comptroller's top responsibilities, as bullet-pointed on the office's website, are "conducting performance and financial audits of all City agencies," "serving as a fiduciary to the City's five public pension funds," "providing comprehensive oversight of the City's budget and fiscal condition," "reviewing City contracts for integrity, accountability and fiscal compliance," and "resolving claims both on behalf of and against the City."

Or, you know, pressuring private companies to do race and gender checks.

On Thursday, New York Comptroller Brad Lander proudly announced that the city's pension funds, with their estimated $263 billion under management, had successfully pressured four huge Wall Street firms (Goldman Sachs, Morgan Stanley, JPMorgan Chase, and BlackRock), plus Ford Motor Company, to publicly disclose a "Board Matrix" containing the "self-identified gender, race and/or ethnicity of individual directors."

"Pronounced commitments to diversity and inclusion ring hollow if those values are not reflected in the boardroom where decisions are made impacting their entire workforce," Lander said in a statement. "The strongest boards and management teams are those that reflect the diversity of their workforce, and of our communities. Diversity is a key factor in performance and essential to the long-term value, a priority for many investors."

The comptroller's office expressed disappointment that a sixth firm, NextEra Energy, "refused" to cough up race and gender self-identification of individual board members, opting instead to release that information in aggregate. "The imposition of a prescriptive matrix by individual director can promote a check-the-box approach to refreshment, thus increasing the risk of bypassing a well-qualified candidate," NextEra explained in a statement.

Lander was not having it.

"Investors do not elect directors as a collective body, but as individuals who are accountable to act as fiduciaries in the boardroom and to oversee the long-term strategies of the company," his office shot back. "Aggregate disclosures are not useful for investors making decisions about how to vote on individual directors at annual general meetings."

It's worth taking a step back and thinking that logic through. What Lander and the pension funds are explicitly saying is that not knowing the racial and gender self-identification of a company's board candidate hinders the decision-making process on how to vote. All things else being equal, if Terry Smith self-identifies as a white male instead of a Latinx female, the diversity-valuing city of New York is assumed to be more likely to vote "no" on his candidacy. (One can only imagine where voters' preferences would lie if the nominee refused to self-identify with either a gender or a race.)

There is something both farcical and creepy about this obsession with tracking other people's (mostly) immutable characteristics and using the power of government to compel disclosure thereof. "Race and/or ethnicity" is a tautologically unscientific classification, not improved upon by the city's suggested "best practices" categories of African American, Asian/Pacific Islander, white/Caucasian, Hispanic/Latino, and Native American. What box should Tiger Woods check? Why are we asking individuals to join a group? What on earth does any of this have to do with providing an auditing function on a city government with a $100 billion budget and the highest taxes in the country?

Gotham is hardly alone in conducting race/gender checks on big business. Illinois since last year has required publicly traded companies based in the state to not only provide a board diversity report, but also a "description of the corporation's policies and practices for promoting diversity, equity and inclusion among its board of directors and executive officers," and "whether and how demographic diversity is considered" in senior hiring. A newer law imposes further diversity reporting requirements on any private company with more than 100 employees.

Maryland in 2019 passed a Gender Diversity in the Board Room law requiring publicly traded companies with sales higher than $5 million and nonprofits with budgets higher than $5 million to submit the gender information of their boards.

And just last month, a Superior Court judge struck down as unconstitutional a 2020 California law requiring publicly traded companies in the state to have on their boards at least one member who self-identifies as "Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or…as gay, lesbian, bisexual or transgender."

The Nasdaq, meanwhile, has imposed board-composition requirements of its own (approved by the Securities and Exchange Commission) that could get noncompliant companies delisted as soon as 2023.

The NYC Comptroller's office has been waging this and related pressure campaigns since long before Brad Lander was elected last year, under the specious reasoning that savvy investors (as opposed to Democratic politicians) were hungry for the potentially market-moving information of whether a company's board was sufficiently female or nonwhite.

"It's a liability for NextEra to refuse to disclose specific board composition data," Manhattan Borough President and pension-fund trustee Mark Levine said in Thursday's press release. "We have a responsibility to current and future pension recipients to minimize the funds' risk and ensure the stability of the monthly checks they rely on in retirement. To do so, we must invest in companies that shareholders have faith in, and trust starts at the board level."

It doesn't take too paranoid a read to conclude that the "risk" Levine refers to might well be coming from the government itself rather than some kind of inherent tendency for an overly white male board to underperform the market.

Governments dominated by Democrats tend to treat the private sector as both a permanent revenue stream and a vehicle for enacting social policy. They then act surprised or indignant when the populations of both businesses and residents decline. As ever with regulation, the richest can absorb the burden while the poorer will shrink away.

Meanwhile, this latest push by New York underlines the grim reality that even the most theoretically public-advocating of elected positions, like comptroller, can in a one-party setting become a grandstanding bully pulpit for dinging Russia, weighing in on gifted and talented programs, and producing maybe my favorite government press release headline of 2022: "Comptroller Lander, Council Members Cabán and Hanif Outline Steps for a Feminist Post-Pandemic Recovery."

Maybe, I don't know, audit the government instead?

NEXT: 107,000 Overdose Deaths Are the Latest Casualties of the War on Drugs

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  1. People have known about DEI and ESGs for a few months here. But welcome to the party.

    1. To be fair, there's no Private Company angle when it's the government doing it rather than big hedge funds that get trillions of taxpayer dollars.

      1. I dont know when some libertarians started to ignore disruptions in markets, socially, or to general freedoms that weren't solely from the government. But all it does is ignore corporate types of fascism where government hides their power a level deep and uses licensing and funding pressure to do things libertarians are against. It is one of the primary reasons for the growth of the Mises caucus in the party.

        Government is not the sole threat to freedoms and markets.

        1. Actually, government IS a sole threat to freedom and markets. Corporations by themselves have no power to take our freedoms away. Only when they work with the government does their power become really pernicious. If the government is separated from the big corporations and shrank to a more palatable measure, neither the government nor corporations would have enough power to take our freedoms away.

          1. People who love money use government to get more. Government likes wealthy people because that’s how they get rich. It’s a symbiotic relationship.

            Ignore it at your peril.

      2. They have a fiduciary duty to take care of the money. Any other concern like board composition might actually cost money instead.

  2. Glad to see that pension funds are more concerned with board diversity than with staying solvent.

    1. They're sticking with what they know they can accomplish.

    2. Well, if they don't stay solvent, the government will print more and make them solvent again. However, if the board composition is not right, the world might end. Also, we need to force each corporation to hire a DIE (Diversity Inclusion & Equity) VP.

  3. Identitarian Politics at its best.

  4. We need a constitutional amendment prohibiting the government from assigning a citizen a race or ethnicity, or taking notice of such.

    1. LOL

      chemjeff will be here shortly to explain how silly this sounds.

      #RadicalIndividualistsForRacialCollectivism

      1. #RadicalIndividualistsForRacialCollectivism

        ha! that one was good, lol. Stay on point OBL, you're the true gem of the commentariat

        1. Ah...

          life is so much better since I muted OBL.

      2. You left out the jeff special, sophist arguments as to why ESGs are good for the shareholder while simultaneously being no big deal.

    2. Well, we already have the 14th Amendment, so it should already be illegal.

      1. No, the 14th doesn't go far enough.

        1. They want "equity". Equality is for shit, since it leaves so much of the outcome based on individual efforts.

    3. That was the only plank of my brief attempt to come up with "libertarian fascism" that I could come up with.
      Have to admit, I didn't put a ton of effort into developing the ideology.

      1. Is that the "We're going to take over and forcibly leave everyone alone" platform?

  5. The modern Democratic Party's obsession with race is the best thing that ever happened for Koch / Reason libertarianism. Because it convinced Democrats to see immigrants primarily as "Black and Brown bodies" — leaving them no choice but to embrace our benefactor Charles Koch's open borders agenda.

    #BillionairesKnowBest
    #CheapLaborAboveAll

    1. #TrillionairesForBidenflationKnowBest

  6. "self-identified gender, race and/or ethnicity of individual directors."

    Have the directors self-identify as African immigrant women, problem solved.

    1. White: 60.1% (Non-Hispanic) -- Hispanic: 18.5% -- Black: 12.2% -- Asian: 5.6% is only 96.4%

      The 15 member LA City Council which is probably the most corrupt city council has this breakdown

      Race/ethnic number Percent
      White: 2 13% Buscaino, Bonin
      White/Nat Am 1 6.7% O'Farrell
      Black 3 20% Wesson in his 4th of 3 terms, Dawson, Price
      Asian 2 13% Raman, Lee
      Hispanic 4 26.7% Martinez, Cedillo, Rodriguez, de Leon
      Jewish 2 13% Koretz, Blumenfield (Jews are 1.8% of US pop)
      Armenian 1 6.7% Krekorian ( There are 485,970 Armenians in US)
      Gays 2 13% Bonin, O'Farrell
      Female 3 2 % Martinez, Rodriguez

      Look who is underpresented -- white men and women. Under this ratio approach, Asians and Hispanics, Blacks, Jews and Armenians are over represented

      1. Armenians should be counted as white. Their European, primarily of Slavic and Greek heritage.

        1. I would not say that to an Armenian unless you want a fight. They trace their culture back to pre-Christian ("BC") times, quite separate of either Slavic or other eastern Mediterranean groups.

        2. Are you mistakening Armenians for Aromanians?

    2. Exactly. All we have to do is self identify by checking whatever boxes we feel like that day. And change it all the time. That throws a monkey wrench in their attempts at this kind of measure.

      I do this regularly with online surveys. I just check whatever income/race/gender/religion/ethnicity I feel like. And make sure to never be consistent. This makes the metadata about me just useless megadata. My email inboxes are proof of this.

    3. Yeah, that 'self-identified' rang out to me too.

    4. Or just as ungendered.

  7. Skin color is the most important thing.
    It’s like MLK never existed.

    1. Don't forget "Whether you claim to have a vagina ... or not."

      1. Oh, I totally don't have a vagina. But since I identify as a woman, these are totally menstrual cramps, not just gas.

        GIMME A BOARD POSITION!

  8. Absolutely just have everyone on the board identify as a disabled gay black female. Do it with a straight face.

    1. I am a mixed race, male-female midget who faces discrimination because I am 6'2"

    2. I saw something exactly like that done....at the student job center on campus....circa 1978.....by an outwardly apparent white male. This was back in the days when all this bullshit started and affirmative action was beginning to gain a foothold.

      The idiot behind the counter questioned the job searcher's answers out loud. And got quite a lecture from that job searcher on privacy issues and that he had no right to question his answers.

  9. It seems that, following the midterms, this sort of thinking might be less popular. Things might be changing.

  10. "Investors do not elect directors as a collective body, but as individuals who are accountable to act as fiduciaries in the boardroom and to oversee the long-term strategies of the company," his office shot back. "Aggregate disclosures are not useful for investors making decisions about how to vote on individual directors at annual general meetings."

    It was at this point that Mr. Lander offered to buy up a majority of NextEra stock (which is publicly available for sale) and elect whoever he saw fit to NextEra's board.

    Right?

  11. California is way ahead of New York on this.
    I'm just not sure why any actual liberal would want the government doing background checks on potential directors.

    1. Nothing liberal about any of this.

      1. In today's parlance Liberal = SJW.

        1. Really it's been correct since Rush Limbaugh's day. Less correct then than now but they and their prototypical behavior are what he was referring to and his use is getting progressively more correct as we go on.

  12. "Well, see, it turns out that all our board members identify as Latinx Black indigenous women."

    "Including, um, Charles Emerson Winchester III?"

    "Oh, yes, Charlie, she identifies as half Afro-Cuban, half Navajo."

  13. When they apply these ratios to the NBA, they can apply these formulas to other private businesses.

    1. I've been saying the same thing about all pro sports for years. Everytime this kind of equal employment crap raises it's head. But, that never gains any traction.

      I mean, do I really want to go to a Chinese restaurant where all the staff is Hispanic? Give me racial match between offering and staffing any day.

      1. I mean, do I really want to go to a Chinese restaurant where all the staff is Hispanic?

        When/where I grew up, that was the only place to get Chinese food. Funny that now that we're just 10 yrs. away from having Chinese food shipped from Mars, it matters more than it did then.

      2. I mean, do I really want to go to a Chinese restaurant where all the staff is Hispanic?

        As someone who lives in a fairly small town in New Mexico, allow me to reassure you that the answer is "No". You're welcome. 😉

    2. Those ratios only apply to the COACHING side of the NFL, NBA, etc. You *must* have enough black coaches. But "obviously" on the player side, it's just the best players playing, and we don't care about their skin color (anymore).

  14. What about Private Corporations who can have whoever they want on their boards.

    1. Not in California. At least from 2020 until the new law was struck down.

  15. The evidence in every human's mitochondrial DNA is that we care all descended from Eve who was African. We all are descendants of people who left Africa at some time in the past. This, all Americans are really African Americans. Skin color is just the result of color mutations in our ancestors. All board members should simply check the African American box.

    1. Eve who was African.

      Not Edenian? This whole borders are a meaningless fictional construct *except* when they are, as far as we're concerned, a fictional construct, then they *are* meaningless is getting intractable. I'm not sure I have the right papers to live in the land of confusion.

    2. Good idea, but they will find something to cry about.

    3. Actually, Eden was a democrats dream; there were no borders, so not Africa. "Africa" didn't exist then, just Eden.

  16. A policy that asserts the moral superiority of its supporters, but costs them absolutely nothing to do so. Indeed, they hope that there are objections to the ethics and legality of this policy so that they can accuse its detractors of depravity and bigotry. While others struggle to conform with this policy and in the process are forcibly made to acknowledge the moral leadership of Lander, he simply basks in the giddy glow of self-righteousness.

  17. It is a logical fallacy to assert that unequal outcomes are proof of unequal opportunity. Everyone understands this intuitively, but for some reason many suspend their logic when it comes to certain matters of social equality. More than 80% of public school teachers are females. It is a similar statistic in the nursing industry. Nobody would suggest that this is the result of some insidious conspiracy to restrict male success in these professions. But, if the boardroom does not reflect the same ratios of diversity as general society, the only possible conclusion is that white male bigotry is to blame.

  18. They are simply performing their fiduciary duty.
    I can think of nothing more important to the financial performance of a corporation than the shape and shade of director and board member genitalia. And of course the genitalia of those whom they bugger on the weekends.

  19. Nothing but a cabal of Racist do- nothings. Diversity helps? Bullshit. Diversity is a hindrance. Just how many blacks does it take to screw your company into the ground.

  20. It was a mistake to integrate races.

  21. Is this kind of identity data even legal for a company to ask for?

  22. >Maryland in 2019 passed a Gender Diversity in the Board Room law requiring publicly traded companies with sales higher than $5 million and nonprofits with budgets higher than $5 million to submit the gender information of their boards.

    They used to have 'Gender Diversity in the Bedroom' laws, but those were abandoned as backward.

  23. This race and gender superstition madness has made big business unhinged and disfunctional making our foundations fall.

  24. Dear Citizens,

    Your position in life is no longer a reflection of quality of your work and skill. It will be based on Race and/or Gender...

    Sincerely,
    The Nazi's.

    1. Rewarding accomplishments is white supremacy.

  25. Just need to have the board say they identify as women. It's not "allowed" to question their claims once they make them. If pressed, they can at least claim they are "gender fluid" and momentarily identified as a woman.

    As far as I know, it's biologically impossible to identify as a different race, and any effort to medically attempt to alter one's outer appearance to reflect the claimed racial identity would be, in itself, racist. "The Science" says we can ignore biology only for gender/sex, not race, so claiming a different racial identity won't help pump up the DIE numbers.

  26. If Musk ends up buying Twitter, at least the company will be owned by an African American.

  27. I self identify as an insurrectionist.
    I am completely unrepresented on any board of directors anywhere in the USA.
    Where is my reparation?

  28. In Apple's latest annual report (page 23) they show each board member's Gender Expression, LGBTQ+ status , and Race/Ethnicity. Uggh.

  29. I wonder if this story will receive as many articles as Florida ending the special privileges Disney was getting for Reedy Creek?

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