The policy would require regulated institutions to report the gender, racial and ethnic composition of their boards and management in a bid to pressure those institutions to make ‘progress’ towards diversity ‘goals’ , ostensibly to improve company performance. This policy explicitly promotes racial and gender discrimination, in clear violation of the Fourteenth Amendment, federal anti-discrimination laws, and New York State law. Moreover, it will not even achieve the goals it claims to aim for. The evidence Ms Lacewell relied on is deeply flawed and does not show that discrimination will improve business performance or, in the Orwellian terms of her letter, workplace ‘safety’.
As the warning letter notes, the “evidence” Ms Lacewell relied on is almost all junk social science that doesn’t even include basic conclusions like statistical significance. And the only study that claimed to have found a statistically significant link between racial diversity and business performance was a report by consulting firm McKinsey that explicitly denied that there was a causal link between diversity and performance.
But even if these claims were true, racial discrimination for profit is wrong. If the McKinsey study had found that having more women on boards lowered corporate performance, that would not justify sex discrimination against them.
Edward Blum, the president of the Alliance for Fair Board Recruitment said: “The policy of DFS is illegal and immoral. Earning money through discrimination has been deemed and deemed insufficient.”
jonathan berry, a Boyden Gray & Associates partner who also represents the Alliance in federal court challenges against California and Nasdaq board quotas, said: “The Department of Financial Services‘ justifications for compelling increased board diversity are deeply flawed and do not support its mission to protect the financial industry or its customers. His reduction of diversity to race and gender is wrong and illegal.”
The letter is attached.
Contact: Edward Blum
SOURCE Alliance for Fair Recruitment of Directors