US Rule on Corporate Diversity Set to Take Effect - Building Gender Balanced Business

• The US Securities and Exchange Commission’s rule on disclosure of diversity policies at the country’s 15,000 publicly traded companies is in effect as of Feb. 28, 2010.

• Companies must detail how, and how well, they are identifying and nominating diverse candidates for corporate board seats — if they have such a policy.

• Indeed, companies are not required to have a diversity policy for the board level or any other level — they just have to reveal whether such a policy exists.

• The definition of diversity is also vague, with the SEC saying, “[F]or purposes of this disclosure requirement, companies should be allowed to define diversity in ways that they consider appropriate.”

• Still, some see the disclosure requirement as a prod. Michael Littenberg, a partner and securities attorney at Schulte Roth & Zabel, said: “[I]f a public company affirmatively says it doesn’t consider diversity at the board level, there could very well be various important constituencies that will take issue with that. It’s not what you want to be known for.”



Diversity Inc.‘s assessment of the new rules