Disability:IN and the American Association of People with Disabilities Say Nasdaq’s New Board Diversity Reporting Rule Is a Missed Opportunity for People with Disabilities

Disability:IN, along with the American Association of Persons with Disabilities (AAPD), co-creators of the Disability Equality Index, are deeply disappointed that the SEC has ratified Nasdaq’s proposed board diversity requirement rule, which in its current form excludes people with disabilities from the meaning of “diverse” and the opportunity to reach the highest levels of Corporate America: the boardroom.

The disability community comprises 1.3 billion people worldwide, including nearly 33 million working-age Americans, and should be included in corporate diversity initiatives and in the national conversation around diversity and equality. We repeatedly engaged Nasdaq and the SEC to make the case that people with disabilities are a marginalized minority group akin to women, racial and ethnic minorities, and LGBTQ+. While these populations were rightfully included in Nasdaq’s proposal, people with disabilities were wrongly left out.

Nasdaq declined to revise its proposed rule despite a number of civil rights organizations publicly endorsing the inclusion of people with disabilities in letters to the SEC, including The Leadership Conference on Human Rights. Other strategic allies voiced their support in a joint letter including The National LGBT Chamber of Commerce, National Veteran-Owned Business Association, US Black Chamber, United States Hispanic Chamber of Commerce, US Pan Asian American Chamber of Commerce, Women Impacting Public Policy, and Out & Equal.

On July 26, we celebrated the 31st anniversary of the Americans with Disabilities Act, the civil rights law recognizing people with disabilities as a discrete minority population that has been subjected to discrimination and denied access to employment based on myths, fears, and stereotypes—leading to extreme economic and social inequality. The ADA defines disability as physical or mental impairment that substantially limits one or more major life activities for an individual. It is these very experiences that make people with disabilities vital assets to corporate boards: Boards govern better when members can lend their diverse abilities and perspectives.  In fact, disability is the very definition of diversity, as it does not discriminate on the basis of sex, race, ethnicity, gender, gender identity or expression, sexual orientation, age, or nationality.

We are disappointed that Nasdaq disagrees with this assessment and has effectively shut out people with disabilities. This is a backwards-looking view for a $19 trillion global securities exchange that attracts fast-growth technology companies, with the NASDAQ 100 companies employing nearly six million workers, including those in younger generations who want to work in inclusive, socially responsible environments. Nasdaq stakes its reputation on modernizing financial trading and enhancing the effectiveness of assets, yet fails to see how disability disclosure efforts are rooted in materiality and in line with their mission to protect investors and shareholders and ensure fair and transparent reporting so they can make informed decisions.

Nasdaq is also sending a negative message to corporate America that people with disabilities don’t count in diversity metrics—in sharp contrast to the increasing number of CEOs, companies, institutional investors, and shareholders who say it does matter. More than 65 CEOs have signed the Disability:IN CEO Letter on Disability Inclusion. They know that companies that are more inclusive of persons with disabilities create more profit and long-term value, which has been verified by independent analyses, such as Accenture’s report, “Getting to Equal: The Disability Inclusion Advantage.”

Representation and disclosure at the board level and C-suite has emerged as a material issue in ESG investing and corporate governance. Investors now recognize the impact board diversity has on business performance and are asking companies to measure, benchmark and publicly disclose their disability inclusion metrics. That’s why 30 institutional investors representing $2.8 trillion signed the Joint Investor Statement on Disability Inclusion, calling on corporate America to report their disability advancement initiatives.

We note that this is not the first proposed regulation to include people with disabilities. Companies listed on the Toronto Stock Exchange must disclose the number and percentage of board seats and senior management positions occupied by four groups: women, Indigenous Peoples, persons with disabilities and members of visible minorities. The U.K.’s Financial Conduct Authority (FCA) has just proposed new transparency rules and targets for companies that list in the country. Now open to consultation, The FCA will also consider other aspects of diversity, such as disability and sexual orientation.

We draw Nasdaq’s attention to the SEC, which recently adopted disclosure rules to include human capital management, or how public companies manage their talent, and companies are asked to report material information such as initiatives and statistics relating to diversity and inclusion. In fact, Qualcomm mentions their work with Disability:IN to address the needs of workers with disabilities in their 2020 10-K filing. Similarly, Visa disclosed in its 10-K that it recently established goals to increase the number of employees from underrepresented groups at the vice president level and above in the U.S. by 50% in three years and to increase the number of employees from underrepresented groups in the U.S. by 50% in five years.

In July, Disability:IN, in consultation with AAPD, formalized a partnership with Equilar, a provider of corporate leadership data solutions, to begin to capture and report self-disclosure metrics of executives and board-ready candidates with disabilities. Equilar’s customers include over 1,000 public and private companies, and they also partner with Nasdaq to help Nasdaq-listed companies report on diversity metrics and create more diverse boards. This partnership will deliver the data companies need to accelerate their disability inclusion efforts, and give individuals with disabilities an opportunity to lend their unique perspectives at the executive level.

According to the 2021 Disability Equality Index, the world’s most robust benchmarking program of its kind, only 5% of 12 million employees and 10% of senior executives at the 319 participating companies self-identified as having a disability. Disclosure at the top will go a long way to encouraging more workers to self-disclose and view disability as a strength. Our 2022 DEI will include three new questions to ascertain whether participating companies are pursuing the nomination of board members with disabilities as well as publicly reporting this information.

In sum, Nasdaq’s decision to shut out people with disabilities does not reflect the makeup of today’s marketplace or the recent corporate diversity efforts driven by Black Lives Matter and the pandemic, which have exposed inequalities in business and society. This is a missed opportunity for Nasdaq to hold the torch and empower Corporate America to give more underrepresented minority groups a chance to demonstrate the skills and diverse strengths they bring to the boardroom.

We will continue to work with the Nasdaq, SEC and other exchanges and organizations on future initiatives that impact board diversity in a positive manner. And we will continue advocating on behalf of the one billion people with disabilities, alongside our 280 corporate partners and many allies, as we strive to build a global inclusive economy.