AUSTIN, Texas, Jan. 19, 2022 /PRNewswire/ -- Late yesterday, the Alliance for Fair Board Recruitment sent a letter to Acting New York Department of Financial Services (DFS) Superintendent Adrienne A. Harris to warn DFS about serious legal and factual issues that plague disgraced former Superintendent Linda Lacewell's proposed racially discriminatory disclosure program for banks and other financial institutions.
The policy would require regulated institutions to report the gender, racial, and ethnic makeup of their boards and management with the intent of pressuring these institutions to make "progress" towards diversity "goals," ostensibly to improve firm performance. This policy explicitly encourages race and sex discrimination, in clear violation of the Fourteenth Amendment, federal anti-discrimination laws, and New York State law. Further, it will not even achieve the goals it claims to seek. The evidence Ms. Lacewell relied on is deeply flawed and does not show that discrimination will improve firm performance or—in the Orwellian terms of her letter—workplace "safety."
As the warning letter notes, the "evidence" Ms. Lacewell relied upon is nearly all junk social science that does not even include basic findings like statistical significance. And the one study that did claim to have discovered a statistically significant link between racial diversity and firm performance is a report by the consulting firm McKinsey that explicitly disclaimed that there was any causal link between diversity and performance.
But even if these claims were true, racial discrimination for the sake of profit is evil. If the McKinsey study had found that having more women on boards decreased corporate performance, that would not justify sex discrimination against them.
Edward Blum, the president of the Alliance for Fair Board Recruitment said, "DFS's policy is illegal and immoral. Money making through discrimination has been tried and found wanting."
Jonathan Berry, a partner at Boyden Gray & Associates who also represents the Alliance in federal legal challenges to California and Nasdaq's board quotas, said, "the Department of Financial Services' justifications for coercing increased board diversity are deeply flawed and do not support its mission of protecting the financial industry or its customers. Its reduction of diversity to race and sex is wrongheaded and illegal."
The letter is attached.
Contact: Edward Blum
703-505-1922
edwardjayblum@gmail.com
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SOURCE Alliance for Fair Board Recruitment
