BG&A Presents Argument on SEC Endorsement of Nasdaq Board Diversity Quotas

On August 29, 2022, Boyden Gray & Associates partner Jonathan Berry argued before the United States Court of Appeals for the Fifth Circuit in Alliance for Fair Board Recruitment v. SEC. The case involves a challenge to the SEC’s endorsement of a new rule requiring almost every Nasdaq-listed company to impose “diversity” quotas, setting a minimum number of women and racial and sexual minorities on those companies’ boards of directors. Any company that does not meet these quotas must file an “explanation” for why it failed to do so. An audio recording of the oral argument is available here.

Prior to argument, Berry also appeared as a guest on Fox News’s The Ingraham Angle. A video clip of his appearance is available here.   

The oral arguments were widely covered in the news media, including:

• The Wall Street Journal: Nasdaq Board-Diversity Rule Takes Center Stage in Court Battle (Aug. 29, 2022)

“‘A rule that facially discriminates on the basis of race and sex now has the imprimatur of the federal government,’ said Jonathan Berry, a lawyer for the Alliance for Fair Board Recruitment.”

• Bloomberg: Nasdaq Diversity Rule Challenge Puts Conservatives on Defense (Aug. 29, 2022)

“‘Investor demand, investor interest is not sufficient,’ Jonathan Berry, a Boyden Gray & Associates partner representing the Alliance for Fair Board Recruitment, said during the oral arguments.”

• Reuters: 5th Circuit questions claim that SEC put Nasdaq on a ‘woke mission’ for board diversity (Aug. 29, 2022)

“Jonathan Berry, who represents the anti-affirmative action group Alliance For Fair Board Recruitment, said during oral arguments on Monday that the rule goes beyond a law allowing stock exchanges to make rules to protect investors and ‘promote just and equitable principles of trade.’ . . . Berry said there is no conclusive evidence that diverse boards increase corporate performance.”

• American Banker: Appeals court hears arguments on Nasdaq’s board diversity rules (Aug. 29, 2022)

“‘It seems to be the case that the SEC is letting Nasdaq’s rule play out before it turns to its own rulemakings related to diversity for all public companies,’ Berry said in an interview.”

• Law360: 5th Circ. Questions Challenge To Nasdaq Board Diversity Rule (Aug. 29, 2022)

“Jonathan Berry of Boyden Gray & Associates, representing the Alliance for Fair Board Recruitment, pointed to statements made by former Democratic Commissioner Allison Herren Lee and current Democratic Commissioner Caroline Crenshaw criticizing the SEC for not requiring the disclosure of workforce diversity statistics to investors.”

• Washington Times: Nasdaq’s diversity rule for corporate boards faces legal challenge (Aug. 29, 2022)
• com: 5^th Circuit Judge Skeptical of Challenge to Nasdaq (Aug. 29, 2022)
• Independent Women’s Forum: Nasdaq Board Quotas Get Their Day In Court (Aug. 30, 2022)

The Alliance for Fair Board Recruitment is a non-profit membership corporation whose mission is to promote the recruitment of corporate board members without regard to race, ethnicity, sex and sexual identity.

Boyden Gray & Associates is a boutique litigation and public policy firm, continuing C. Boyden Gray’s decades of service as counselor to presidents, business leaders, legislators, and regulators on matters of constitutional law, regulatory policy, and international affairs.