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DEI is driving big companies to Texas

BlackRock CEO Larry Fink is one of the key drivers behind TXSE. Credit: Getty

June 8, 2024 - 2:30pm

This week, news broke that an organisation by the name of TXSE Group was planning to challenge the NYSE and Nasdaq by launching a Texas Stock Exchange, based in Dallas. Big backers with deep pockets are involved: TXSE has already raised $120 million from investors including BlackRock and Citadel Securities, “as well as prominent business leaders from around the country”.

According to the WSJ, the idea behind the TXSE is to be “more CEO-friendly”, apolitical, and with fewer “onerous” compliance costs than the NYSE-Nasdaq duopoly. The strategy is to attract companies that are displeased with regulations such as Nasdaq’s “Board Diversity Rule”. In force since 2023, this rule requires boards to have at least one member who self-identifies as a woman and another who self-identifies as an underrepresented minority or LGBTQ+.

For those mystified by who might qualify as an underrepresented minority, Nasdaq provides a helpful list: “an individual who self-identifies as one or more of the following: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or Two or More Races or Ethnicities”.

Needless to say, this could be more easily summarised as “not white”. Nasdaq also provides companies with a handy “board diversity matrix template”. But perhaps the most interesting part of the rule is the public shaming aspect: Bloomberg Law reports that naughty organisations which fail to hit their quotas are obliged to explain “in their proxy statements or on their websites why they’re unable to comply”.

Meanwhile, an increasing number of companies prefer to stay private. According to CNN, the number of companies listed on US exchanges has dropped from 8,000 to 3,700 since 1996: “Intensified reporting requirements, higher litigation expenses, costly regulations, overbearing board governance, shareholder activism, heightened public scrutiny and the pressure of quarterly earnings have driven companies away from public markets.”

In this context, it is especially interesting to see BlackRock as one of the big backers behind the TXSE. BlackRock is closely identified with “stakeholder capitalism” and its CEO Larry Fink was a driving force in the ESG movement, although in recent years he has attempted to put some distance between himself and the term. Whenever BlackRock is accused of boycotting energy companies Fink likes to stress how much his fund has invested in hydrocarbons, and this February he appeared at an event with Dan Patrick, the Lieutenant Governor of Texas. Nevertheless, in March Texas terminated an $8.5 billion investment in BlackRock on the grounds that the fund’s “boycott of energy companies” is against the state’s interests and “incompatible with the asset manager’s fiduciary duty to Texans”.

Whether or not the TXSE will ultimately be successful in luring companies away from Nasdaq and the NYSE is for the future to determine. But this still seems to be yet another chapter in the ongoing saga by which the cultural and economic dominance of blue-state institutions diminishes as progressives undermine their own position through a combination of overreach, arrogance, naivete and myopia. Texas is already home to more Fortune 500 companies than any other state, and soon it will have its own stock exchange. The US is a large country, and if alternatives don’t exist, somebody will create one.


Daniel Kalder is an author based in Texas. Previously, he spent ten years living in the former Soviet bloc. His latest book, Dictator Literature, is published by Oneworld. He also writes on Substack: Thus Spake Daniel Kalder.

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Hugh Bryant
Hugh Bryant
9 days ago

If you want to understand why people in the US deep south – just like those in South Asia – are not keen on giving up cheap energy for the sake of climate change, then try living and working in either region without air conditioning.

Julian Farrows
Julian Farrows
9 days ago
Reply to  Hugh Bryant

Not only that there is also so much nature out here – too much. You constantly have keep your yard mowed and have the pest control guy come over to spray for bugs. Climate change fear is really an urban thing.

Nathan Sapio
Nathan Sapio
9 days ago
Reply to  Hugh Bryant

Just spent 4 days without power here after wind blew over some transmission lines. If any single climate activist lived here for 4 days without power, they would all recent, repent, and go get a job with an oil company, rather than face a potential future with widespread insufficient power.

Last edited 9 days ago by Nathan Sapio
AC Harper
AC Harper
9 days ago

“If you build it, he will come.”
~Field of Dreams (1989)
It seems that more and more people are subverting the will of the Powers That Be by voting with their feet. Moving out of overbearing cities, emigrating, seeking alternate suppliers of service.

william langdale
william langdale
9 days ago

“progressives undermine their own position through a combination of overreach, arrogance, naivete and myopia”.Pretty much sums up the Western world these days.

Ian Barton
Ian Barton
9 days ago

TXSE sounds like a superb idea. The ESG-fixated can have their exchange – and traditional folk can have a sensible alternative. How about rebranding NYSE as the “Delaware Exchange”. That might give the progressives a great brand to spaff their pension funds into.

Last edited 9 days ago by Ian Barton
Buena Vista
Buena Vista
9 days ago
Reply to  Ian Barton

Larry Fink is all about ESG. He is essentially the very face of ESG. I’m sure he’s going to Texas for some other nefarious reason.
Beware of Trojans bearing gifts.

Glen Page
Glen Page
6 days ago
Reply to  Buena Vista

yep, Fink is the last person on the planet that should be trusted.

Nathan Sapio
Nathan Sapio
9 days ago

This is yet another reason to be a proud citizen of the Republic of Texas.

Ben Shipley
Ben Shipley
9 days ago

We don’t dislike Texas and even own a house there. But if Texas is taking people and business from New York and California, two of the most beautiful and potentially livable states in the union, it says everything about their governments and little about the charms of the lone star state. They really are that badly run. Amazing.

Samuel Ross
Samuel Ross
9 days ago

If I self-identify as a duck, does that mean I’m really a duck? Quack quack ……

Sylvia Volk
Sylvia Volk
9 days ago

So by Nasdaq standards it’s okay if someone self-identifies as, say, a Hawaiian? Wow. Sounds like a bold launch off a cliff there …

Walter Lantz
Walter Lantz
8 days ago

An article from a few years ago explained the WEF’s stakeholder capitalism and the role of DEI/ESG. Progressive governments could advance their progressive agendas by favouring corporations that adopted DEI/ESG. Corporations that tick the DEI/ESG box would have a competitive edge on the competition. The Canadian government still does this. To help alleviate the housing shortage a multi-$B fund has been made available to finance local municipal infrastructure improvements – if applications for such projects meet DEI requirements.
There’s a funny video somewhere on YT that tells the story of San Francisco’s DEI project failure. In brief: the City of SF banned any purchasing deals with companies in Red states or any firm anywhere “that does not share our values”. The ensuing financial disaster and subsequent climbdown is pure entertainment.
If the political winds keep blowing in from the Right we should expect (hopefully) that governments drop DEI/ESG requirements. If businesses wish to continue such practices they are free to do so but if there’s no advantage in it why would they.

Robert Paul
Robert Paul
9 days ago

Given the nature of today’s politics, blue state governments will simply dig in; given the nature of capitalism, corporations will adapt.

Chris Milburn
Chris Milburn
8 days ago

More proof that the USA needs a “national divorce”. Everyone has forgotten that it was supposed to be “these united states”, not “The United States”. Thank God for Texas, Florida, and other bastions of sanity.

William Brand
William Brand
9 days ago

All those WOKE rules put in by New York can drive some companies in red states to move registration to Texas. Musk is moving Tesla from Delaware to Texas. Will he move his stock registration also.

El Uro
El Uro
9 days ago

Nasdaq’s “Board Diversity Rule”???

Daniel Lee
Daniel Lee
8 days ago

Well, I guess next we’ll see a Democrat push in Congress making mandatory the kind of Woke-compliance regulations the Texas exchange is designed to nullify.

Victor James
Victor James
9 days ago

Larry fink hates white gentiles. He is a Christ hater. Isn’t it obvious?

elliot reisman
elliot reisman
7 days ago
Reply to  Victor James

Fink has values I do not like, but could we please stop with the Anti-Semitism.