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In the latest development in what has become a widespread push toward greater board diversity, Nasdaq has filed a proposal with the SEC that would require Nasdaq-listed companies to disclose whether the companies meet Nasdaq-specified board diversity requirements. If approved, the new listing rules would require companies to have at least one female director and one director who is a racial minority or who self-identifies as LGBTQ+, or to provide an explanation why they do not. A copy of Nasdaq’s December 1, 2020 proposal can be found here. Nasdaq’s December 1, 2020 press release concerning the proposal can be found here.
Continue Reading Nasdaq Pushes Proposed Board Diversity Listing Rules

As I have noted in prior posts, one of the follow-on effects of the recent racial justice movement has been increased scrutiny of racial diversity within corporate management, and in particular on corporate boards. The boards of several publicly traded companies have been hit with shareholder derivative lawsuits alleging that the directors breached their fiduciary duties by failing to include African-American individuals on the boards, while at the same time the companies were touting their diversity and inclusion efforts.

In addition to the recent litigation, efforts to advance board racial diversity have included legislation. Earlier this year, the California legislature passed a bill mandating the inclusion on boards of California headquartered companies of representatives of “underrepresented communities.” On September 30, 2020, California Governor Gavin Newsom signed the bill into law. As discussed below, even though the law has only been in place for a few days, a lawsuit challenging the bill has already been filed.
Continue Reading California Board of Directors Diversity Bill Signed Into Law, Challenged by Lawsuit

California-based high technology firm Cisco Systems is the latest company to be hit with a racial diversity lawsuit, based on allegations that its directors breached their fiduciary duties to the company by failing to include an African-American on the company’s board, despite the company’s numerous statements about its commitment to diversity. Though this latest lawsuit is in many respects similar to the previously filed board diversity lawsuits, it does differ in that it was not filed by the plaintiffs’ firm that has filed most of these lawsuits and also because the lawsuit follows a pre-suit demand on Cisco’s board, by contrast to most of the prior suits where the plaintiffs had made no demand and instead argued demand futility. A copy of the complaint in the Cisco Systems action can be found here.
Continue Reading Cisco Systems Hit With Board Diversity Lawsuit

One of the focal points in the scrutiny that has followed in the wake of the current social justice movement has been the question of diversity at America’s companies, including the lack of diversity on corporate boards. Among other things, a number of boards of public companies lacking Black directors have been sued in a series of shareholders derivative lawsuits alleging that the board members violated their fiduciary duties by failing to live up to state diversity objectives, as discussed most recently. Now, in the latest example of this type of litigation, a plaintiff shareholder has filed a derivative lawsuit against the board of Monster Beverage Corporation, alleging that the directors breached their fiduciary duties and deceived investors by claiming to have diversity and inclusion programs while have no Black directors on the board. A copy of the complaint can be found here.
Continue Reading Monster Beverage Hit With Latest Board Diversity Lawsuit

In yesterday’s post, I noted that earlier this week, a plaintiff shareholder had filed a board diversity lawsuit against the Gap. Turns out, that the same day yet another company was also hit with a board diversity shareholder derivative lawsuit, this time involving the board of directors and Chief Executive Officer of the medical and industrial product company Danaher Corporation. The Danaher lawsuit is in many ways substantially similar to the prior lawsuits that have been filed against companies that have no African-Americans on their boards of directors; however, the Danaher lawsuit is the first filed against a company outside California (Danaher is based in the District of Columbia), and it was filed by a different law firm than the one that had filed all of the prior board diversity suits. The complaint in the Danaher action can be found here.
Continue Reading Yet Another Board Diversity Derivative Lawsuit, This Time Against Danaher’s Board

In the latest in a series of lawsuits against high-profile companies alleging that the companies’ boards lack African-American directors, a plaintiff shareholder has filed a shareholder derivative lawsuit against the board of directors of the clothing retailer, The Gap. The lawsuit is substantially similar to the lawsuits filed by the same plaintiffs’ law firm against Oracle (here), Facebook (here), Qualcomm (here), and NortonLifeLock (here). A copy of the lawsuit against The Gap’s board can be found here.
Continue Reading The Gap Hit with Board Diversity Derivative Lawsuit

Cybersecurity firm NortonLifeLock became the latest company to be hit with a shareholder derivative lawsuit alleging that, despite company statements about its  commitment to diversity and inclusion, the company’s board and senior management lacks racial diversity. The NortonLifeLock lawsuit follows after substantially similar lawsuits – filed by the same law firm – were previously filed against Oracle (about which refer here), Facebook (here), and Qualcomm (here). A copy of the August 5, 2020 lawsuit against NortonLifeLock’s board can be found here.
Continue Reading NortonLifeLock Hit with Board Diversity Derivative Suit

In the latest in a series of lawsuits that recently have been filed against corporate directors based on board diversity issues, a Qualcomm shareholder has filed a derivative lawsuit against the company’s board, alleging that the company’s directors violated their duties to the company and shareholders by falling short of stated objectives on diversity and inclusion and by falling to include a single African-American either on the board or among the company’s senior officers. The lawsuit against Qualcomm follows similar lawsuit filed earlier this month against Oracle and Facebook. A copy of the July 17, 2020 complaint against the Qualcomm board can be found here.
Continue Reading Qualcomm Hit with Board Racial Diversity Derivative Lawsuit