Last week, the U.S. Impact Investing Alliance submitted comments to the SEC in support of a proposal from Nasdaq related to board diversity and disclosure. Countless studies have shown that gender and racial diversity can drive positive business performance, and investors are increasingly demanding access to clear and comparable data on these and other material issues. If approved by the SEC, all Nasdaq-listed companies would be required to have at least one female board member as well as one member who self-identifies as an “underrepresented minority or LGBTQ+.” Additionally, companies would be required to report on their board composition in a standardized manner.

In its letter, the Alliance encourages further exploration by both the SEC and Nasdaq on expanding the proposed definition of diversity to include other underrepresented constituencies, such as individuals with disability. Beyond the scope of the proposal, the Alliance also urges the SEC to go further and mandate standardized disclosures by large corporations on environmental, social and governance (ESG) factors broadly. Nevertheless, tracking the diverse representation of boards is an important step toward meaningfully increasing transparency in the capital markets and ensuring accountability to a broad range of stakeholders .