Official Washington, D.C., will become more diverse, and more representative of America, in January when Kamala Harris takes office as the first woman elected as vice president, as well as the first Black woman and first person of South Asian descent in the job.
Among those selected by President-elect Joe Biden for his Cabinet, Janet Yellen, if approved by the Senate, would become the first female treasury secretary. Other picks: Wally Adeyemo would be the first Black deputy treasury secretary, Neera Tanden would be the first woman of color to lead the Office of Management and Budget, and Cecilia Rouse the first woman of color to chair the Council of Economic Advisers.
Voters in congressional races also saw talent and strength in diversity. There will be at least 141 women in the U.S. House and Senate, a record number, according to the Center for American Women and Politics at Rutgers University. That will include at least 50 women of color, also a record.
None of this happened because of a legal requirement or quota. It happened because progress toward equality and diversity, while often frustratingly slow, can be a force when it is meaningfully pursued. Biden, whose entire senior staff in charge of communications and messaging will be women, is putting a premium on diversity.
The benefits of diversifying our national leadership teams and institutions should be obvious. Organizations are strongest when they hire and promote from the largest applicant pool. The more diverse the workforce, the broader the thinking will be. Any company in 2020 still run strictly by white men of similar background is asking to be lapped by smarter, more nimble, more imaginative competitors.
Yet opportunities, especially at the highest levels of business, are still not always fairly distributed. For example, there are just 41 women CEOs at Fortune 500 companies. Given the slow pace of change, there’s a temptation to jam the door open by requiring certain companies to hire a diverse board of directors. California passed such a law, and Illinois considered it. But that’s the wrong approach.
On Tuesday, the tech-heavy Nasdaq Stock Market joined in by saying it wants to require each listed company to have at least one woman and one person of diverse racial identities or sexual orientation on their boards, or face the possibility of being kicked out. To enforce the rule, Nasdaq will need to seek permission from the Securities and Exchange Commission, which adds a layer of government overreach to what should be a decision each company realizes is in its own interest, and in the interests of its employees, suppliers and customers.
Every company should be striving to be more diverse. The successful path requires a commitment to recruiting and nurturing talent. It’s appropriate for employees, shareholders and other influential voices to bring the heat when executives shirk this important obligation. Diversity on a corporate board is especially important because it has ultimate leadership authority. But instituting a top-down, government-inserted regulatory requirement misdirects the responsibility, interferes with the operation of individual companies and risks cheapening the accomplishments of many. Governments and other powerful outside entities should not mandate specific hiring practices. Encourage, yes. Dictate, no.
In addition, many public corporate entities already comply with what Nasdaq is asking, according to CNN Business. “In fact, four of the five largest companies on the exchange in terms of market value … have boards on which straight white men are in the minority.”
Also from CNN Business: “A spokesman for Nasdaq said it believes that at least 85% of its 3,249 listed companies already meet the first criteria of the rule, having either one woman or one underrepresented minority on their boards.”
The corporate world is headed in the right direction, although slowly. Corporate boards too. Why? Because it’s much better for organizations and their leaders to commit to having the most talented and diverse workforce imaginable. Who’d want to do business or work somewhere that wasn’t?
Editorials reflect the opinion of the Chicago Tribune Editorial Board.
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