The pressure to diversify boardrooms is growing. Six states now have legislation surrounding board diversity with an additional seven states with legislation in progress. On August 6, 2021, the SEC approved Nasdaq’s Board Diversity Rule, which requires companies listed on their U.S. exchange to publicly disclose board-level diversity statistics and have, or explain why they do not have, at least two diverse directors.
Having seen the data on board diversity, some investors have started seeing monolithic boards on their portfolios as liabilities. With the BRI score, investors can quickly determine which boards aren’t up to scratch and target their intervention strategically to improve their portfolios’ governance and financial returns.