Mon, 08 Aug 22 11:13:40 +0000

Nasdaq's new diversity rules aren't enough

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New York (CNN Business)Wall Street takes the call for greater corporate diversity seriously. at last.

S&For the first time ever, every company listed on the P 500 has at least one racially or ethnically diverse directorS&About 11% of P boards did not

and currently the single most important attribute prioritized when looking for company directors isPwC's 2021The numbers bear that out, according to an annual survey of corporate directors. Supports tying to inclusion goals, up 13 percentage points from last year

todayallNasdaq listings It's also a critical deadline for companies, so it's good to see those numbers finally rising. The total number of board members in the company and how those board members self-identify as to gender, race, ethnicity, and LGBTQ+ status. The results will be published in the annual meeting proxy statement or on the company's website.

From August 2023, companies trading on exchanges must have at least two diverse board members or achieve this diversity goal. You should explain why you haven't.

"The stock exchanges are sending a big message about their priorities because what we measure shows what we value." ,” wrote S. Mitra Kalita, founder and CEO of URL. In a recent op-ed on the importance of board diversity, media and former CNN executives

said, "By disclosing this information to investors, shareholders , we can support companies that stand for what they want and make a difference.Investment from those who don't," said Carolyn Maloney, a New York Democrat who chairs the House Oversight and Reform Committee. In a statement praising the move, the House of Representatives said: "In addition to creating morality and common sense, increased diversity makes economic sense. The study suggests that companies with more diverse leadership

The 2020 killing of George Floyd by Minneapolis police and the eruption of Black Lives Matter protests across the United States , the demand for corporate behavior around diversity and inclusion has also increased, said Fasil Michael, head of thought leadership for ISS Governance Solutions.

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

Although 19% of the total US population identifies as Hispanic or Latino, the directors of that group are his S&P500 accounted for only 5% of board seats in

"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. increase. “While there is reason to celebrate recent progress, many companies are expected to grapple with board diversity issues alongside C-suite diversity, employee equity and fair compensation. We have yet to see the long-term trajectory of many companies' diversity and inclusion initiatives.”

It's not just the board. According to a new McKinsey study, nearly 75% of Black and Hispanic employees wait for a table, sit on store shelves, compared to 58% of White employees. It turns out that they are engaged in front-line work such as arranging products and folding clothes. And 3 of his 4 of these employees want a promotion, but only 1 of her 4 gets a promotion. 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.

Furthermore, according to McKinsey, front-line hourly employees believe diversity and inclusion policies make a difference more than corporate employees. Chances are he's nearly 20% lower.

Recently, large companies have enthusiastically adopted his ESG incentives, is a professor at New York University's Stern School of Business and executive director of its Ethics Systems Program. Some Alison Taylorand Brian Harward write. Principal Investigator of the program.

But much of what they do "seems like a selfish strategy to generate positive PR," the joint statement said. The current state of corporate diversity efforts is "disappointing but understandable. Investors put pressure on them, carve boxes, and make it the equivalent of a virtue movement - and it shows.} )For example, last year the company announced that it would tie 15% of executive compensation to achieving an annual increase in the percentage of women and minorities in senior management.

That's great. At the same time, however,McDonald's abuses and "redlines" black franchise owners, pushing them to the most disadvantaged locations requiring costly and impractical renovations, making them more vulnerable. He was accused of conducting stringent grading and shop inspections.

"What encouraged that behavior?" Ask Taylor and Harward. "There was some connection between the lack of diversity in senior management and this lawsuit. More broadly." In other words, why should executives be given bonuses to achieve the essential goals that should be at the heart of the company's values and mission?"

Wall Street Bad News

Last year was a lucrative one for black fleece vest wearers working in Midtown Manhattan, but we call it Wall Street.As of 2021. Mergers, Acquisitions, IPOs.

Economy is back baby. Pfizer, Moderna, Johnson & Thanks to Johnson's hard work, Covid is finally Wall Street Warriors Were Working The average bonus hit a record $257,500, up 20% from the previous year. This is on top of a very generous base salary.

and hits in 2022.

Covid rates still at record highs and shutdowns disrupting supply chains.Inflation, interest rates and lack of IPOs are high The financial world is tough. M&activity is down his 25% and IPOs are halved from 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 currently expected to be significantly reduced. A person working in the financial industry can expect his compensation to drop by nearly 50%, reports my CNN business colleague Alison Morrow. See here for details.

Inflation, the new word to watch

We all know that record high inflation has hit our wallets. This earnings season shows that companies are noticing, too.

References to 'inflation' increased by 26% in public company earnings reports this quarter, according to new data from Cision.

This carried over to Twitter, where 'inflation' was mentioned 19,518 times, compared to 827 in the same period in 2021. Interestingly, “corporate greed” was a popular phrase among Twitter users.

Companies increased references to 'interest rates' and 'recession' in this quarter's earnings reports by 9% and 4%, respectively.

However, Russia's invasion of Ukraine was seen as a major headwind last quarter, with negative mentions dropping 77% this quarter and pandemic talk dropping 17%.

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

Also today: His 3-year inflation forecast for the NY Fed was released.

Announced tomorrow: Sysco, Coinbase and Hyatt to report earnings.