The emphasis on diversity, equity and inclusion (DEI) in the boardroom is shaping up to be a permanent reframing of all that boards do and, more broadly, how companies approach corporate governance writ large. Though this emphasis has been steadily increasing over the past several years, the events of 2020 have accelerated ongoing discussions and efforts, and public boards should expect increased pressure from stakeholders â if not explicit action taken against them â if real progress is not achieved.
Part of that pressure will come in the form of legislation and regulation. In the fall of 2020, California was the first state to enact legislation requiring public companies headquartered in the state to have at least one board member from an underrepresented community by the end of 2021. Nasdaqâs newly proposed listing requirement has a similar mandate and is expected to be approved by the SEC. These regulations will likely use census definitions of diversity when assessing compliance, as California has.