The Securities and Exchange Commission is looking to reach inside corporate governance some more because it Knows Better how to run a company than do the leaders and managers of that company. The latest travesty is a new rule requiring disclosure of the diversity—by which the SEC means ethnic and gender diversity—of a public company’s board of directors. This would be an expansion of the SEC’s existing 2009 rule requiring companies to disclose their plans for diversity.
Berkshire Hathaway took the correct position in its SEC disclosure regarding those plans:
Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the Company.
This, though, isn’t politically correct enough to suit the SEC; hence the new rule under consideration. It isn’t enough that a company should seek actual talent and skill, it must seek the government-directed correct balance of gender and ethnicity.
This raises a question in my mind: would that be biological ethnicity and gender or self-identified ethnicity and gender?
For the record, I self-identify my ethnicity as American, and I self-identify my gender as The US Male.