Justin Danhof: Nasdaq's 'Diversity' Rule Discriminates Against White Men

Justin Danhof, executive vice president of the National Center for Public Policy Research (NCPPR) and director of the Free Enterprise Project, told Breitbart News on Sunday the Securities and Exchange Commission (SEC) is allowing the Nasdaq stock exchange to discriminate against “white straight Christian men” in pursuit of quotas related to ethnicity, race, religion, and sexual preference.

In December 2020, Nasdaq proposed changing its listing requirements for corporations on its exchange in pursuit of “diversity” on corporate boards. The SEC approved Nasdaq’s request in August for new disclosure requirements pertaining to the ethnic, racial, religious, and sexual composition of company executives.

Nasdaq described its proposal as advancing the cause of “diversity” to enhance “inclusive representation” of “minorities” and “the LGBTQ+ community”:

Nasdaq … today filed a proposal with the U.S. Securities and Exchange Commission (SEC) to adopt new listing rules related to board diversity and disclosure. If approved by the SEC, the new listing rules would require all companies listed on Nasdaq’s U.S. exchange to publicly disclose consistent, transparent diversity statistics regarding their board of directors. Additionally, the rules would require most Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority1 or LGBTQ+. Foreign companies and smaller reporting companies would have additional flexibility in satisfying this requirement with two female directors.

The NCPPR, a conservative think tank that advocates free market policies, sued the SEC on Tuesday after its approval of Nasdaq’s proposal to impose ethnic, racial, religious, and sexual quotas in corporate boardrooms.

Danhof remarked, “There’s a lawsuit in the Fifth Circuit that is being run by C. Boyden Gray’s law firm, and that is a group of board members who are otherwise wildly, incredibly, suitably qualified to be board members of Nasdaq companies, but they will not get a chance under this rule, basically meaning they are white, straight Christian men who have incredible experience, have served on boards, and yet under this rule, it’s almost certain that they won’t even be given a chance to be looked at.”

Nasdaq’s new “diversity” rule for its listed companies would “out” homosexuals who may wish to keep their sexual preferences private, Danhof noted.

“There is a second part of the First Amendment that people forget, and that is [a prohibition against] compelled speech, and so what the Nasdaq is doing is compelling speech of corporate board members,” he stated. “There’s a board that certifies that [Nasdaq-listed companies] qualify under this rule, that they have two diverse board members, yet, if I look at the board, it’s five white men.”

He continued, “Well, interestingly enough, one of those men must be identifying as another race, and one of them — whether they identify it or not — must be a homosexual. They are compelling speech of those individuals. They are outing people, in a sense, which is a very private personal individual choice for homosexuals on when to identify and in what settings.”

“But now the Nasdaq is declaring that people must out themselves,” Danhof concluded. “That’s compelled speech by a quasi-government body, because the SEC approved it. So that is part of our lawsuit on declaring why this is an invalid law because it violates the First Amendment of the United States Constitution.”

Danhof noted Nasdaq’s quota requirements will not be applied to companies based in China.

Nasdaq President Nelson Griggs described the new quota system as “an opportunity to make progress toward increasing representation of women, underrepresented minorities and the LGBTQ+ community.”