 Nasdaq's plan to require more diversity on U.S. corporate boards has prompted debate about whether it's gone too far, or not far enough, in its efforts to bring underrepresented groups into the boardroom. The exchange operator proposed new rules this month that would require most issuers to include at least one director who identifies as female and one who identifies as an underrepresented minority or LGBTQ. Only a quarter of the companies listed on Nasdaq currently meet that standard. It's taking a step toward achieving "inclusive representation across corporate America," Chief Executive Officer Adena Friedman said. Advocates hailed the move as a milestone that will add much-needed diversity to the top ranks of companies. By contrast, the Wall Street Journal's editorial board blasted Nasdaq's plan as "virtue signaling" that would harm economic growth and job creation.  Adena Friedman speaks virtually during Airbnb Inc. initial public offering (IPO) at the Nasdaq MarketSite in New York on Dec. 10. Photographer: Victor J. Blue/Bloomberg The New York Stock Exchange, Nasdaq's biggest rival, said exchange rules shouldn't be used to make changes that limit investors' choices. "I don't believe that we should be using quotas to define those requirements," NYSE President Stacey Cunningham told Bloomberg TV in an interview this month. NYSE is using its network to help companies tap more diverse board members, and it says investors are already gravitating toward companies that have greater representation. If left to their own devices, boards would probably move slowly. Only 34% of corporate directors say racial and ethnic diversity is very important to have on their board, while 47% say gender diversity is very important, according to a PwC survey. And while there's general support for measures to promote diversity, just 39% of directors think those goals should be included in executive compensation plans, the poll showed. California will require most boards to have three female directors by the end of next year and three racially diverse members by the end of 2022. Illinois will require companies based there to disclose the gender and race of directors by Jan. 1. In Europe, most diversity efforts have focused on boosting the number of women in the boardroom. Nasdaq cited more than two dozen studies linking diverse boards with better financial performance and corporate governance as the rationale behind its proposal. It's giving most companies two to five years to reach the targets, or explain why they couldn't meet the standards. Let's see if the experiment works. | 
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