Brittany S. Hale: 0:32

Hey Brittany, Hi Karen, how are you? I'm good. How are you? I am doing well. I've got some peppermint hot cocoa here with my Santa.

Karen McFarlane: 0:43

With your black Santa Claus.

Brittany S. Hale: 0:46

I love it. You know, there are some spaces that still value diversity, and my home happens to be one of them. There you go.

Karen McFarlane: 0:59

Which is reminding me of that recent controversy with the Boots commercial with the actress from Bridgerton. I can't remember her name right now, but she's playing Mrs Claus and I thought it was a great commercial.

Karen McFarlane: 1:11

It was you know commercial for the boots she had on right Like a shoe commercial Right and people were up in arms that there was a commercial for the boots she had on like a shoe commercial and people were up in arms that there was a Black Mrs Claus, never mind the fact that Santa Claus was still white in the commercial.

Brittany S. Hale: 1:24

Interesting. Yeah, santa doesn't have the freedom to choose whom he loves? I guess not.

Karen McFarlane: 1:33

And you know what? Here's the thing. I think there can be white Santa, black Santa, green Santa, purple. Santa yeah, I agree, because children are not listening to this. Santa isn't real, correct?

Brittany S. Hale: 1:49

wait what he's not. Children aren't listening, but Mina is, you know I'll cover her ears.

Karen McFarlane: 1:54

Sorry, mina, but you know Children aren't listening, but Mina is. Oh sorry, Mina, I'll cover her ears.

Brittany S. Hale: 1:57

Sorry, Mina.

Karen McFarlane: 1:59

But you know, our imagination is free to run wild, that's true, you know.

Brittany S. Hale: 2:07

So it doesn't have to be wild. That's the best part about having an imagination is there are no rules. Exactly, exactly. Santa can be whoever, and I agree with you Exactly, exactly. Santa can be whoever. And.

Karen McFarlane: 2:30

I agree with you. I love the idea of having Santa reflect your own ethnic to come to town, right, and be like, hey, this is my address for real, for real, right, you can find me here. This is my family. Then you know, I've been doing this for I don't know, hundreds of years. I think people will be more focused on how he's lived so long.

Brittany S. Hale: 2:52

All right, we might want to follow his skincare regimen Exactly, rather than the color of his skin Right.

Karen McFarlane: 3:05

So anyway, super interesting.

Brittany S. Hale: 3:09

It's also a weird movie.

Karen McFarlane: 3:12

But I'll talk to you about the weird movie later. But so this week week a new ruling came down. So we have been seeing, you know, week after week after week. You know this, I guess it's, you know we can definitely call it a backlash against diversity, equity, inclusion, and just it keeps spiraling in a negative direction.

Brittany S. Hale: 3:38

So we need like a sound for every time there's like some sort of DEI policy that gets you know I'm going to find a sound.

Karen McFarlane: 3:49

We have sounds on here. Okay, yes, you know, but maybe next time. Yes, you know, but maybe next time. But the US Appeals Court in New Orleans. They rejected NASDAQ's diversity rules for company boards.

Brittany S. Hale: 4:29

I saw that. I want to reiterate why it is so critically important for executive leaders, specifically the president, to appoint federal judges in different circuits around the country, Because if you are, you know a lot of these federal judges. They're tenured right. These can be lifetime appointments, and so you want to ensure that your specific policy and, by extension, your perception of America, what it should be, what we're working toward is protected.

Karen McFarlane: 5:17

That's absolutely right and that's actually, you know, one of theoring up the judicial system with judges that might have a particular point of view, and so, just as you said, they have these long tenures and they may or may not be amicable to be, you know, amicable to, you know, dei, right, in its original form, right.

Karen McFarlane: 5:41

And so then we see decisions like this, you know, trickle and we trickling down, especially since the Supreme Court set aside affirmative action rules, right, we've seen that reaction to what happens next, right? So you know, this is to me like a big deal, right? Just for a little background, I think it was in 2020, but NASDAQ put together a proposal that was approved by the SEC, proposal that was approved by the SEC, which basically asked huge corporations I think they were in the Russell 3000, I think to ensure that their boards included at least one woman and at least one person who represents an underrepresented group or LGBTQ, right? So, basically, in their words, like two diverse board members, and if they didn't, they needed to explain why not, otherwise they could be kicked off the exchange.

Brittany S. Hale: 6:55

Interesting.

Karen McFarlane: 6:59

Yeah right, they'd be kicked off, they could be kicked off the exchange. So, yeah Right, it's like the ultimate accountability. So, okay, you can, you don't, you don't do it. But why? And it has to be a reasonable explanation, and I'm sure there you know, from a board perspective, in terms of their documentation they have to. They would have to show you know what steps they went through to secure these board seats, who they interviewed, all the details to show that it just wasn't possible to obtain the necessary skill sets to fill whatever gaps or needs were required for the board. And I'm sure that's a difficult thing to do, For sure.

Brittany S. Hale: 7:36

For sure, and I guess I'm also just thinking really kind of about the rationale behind this, which is when left to their own devices. We understand that these business leaders are not going to do this on their own Right, as much as we may want them to. As good as it can be for business, we recognize that it's not something that people are doing on their own, and so there's an effort to create requirements to incentivize people to move forward, and this isn't unique in American history because, I mean, we had integration right. We've seen time and time again that, unfortunately, we need a little bit of a legislative push.

Karen McFarlane: 8:39

Yeah, on all subjects, right, because you know, at the end of the day, all businesses want to be profitable, right, and so it's about their vision of what, of how profitability will be obtained, and that vision, you know, historically has been, you know, white males, right, that's how the system has been set up. So I think it's a little. It's hard for organizations that have these, you know, these margins that they have to make every single year and responsibilities to their stakeholders and their investors, to focus on things that they may not feel are a direct line to profitability, although you know that has been proven in many different ways. So, for example, in the original proposal, nasdaq cited a report from the Carlyle Group, which is an investment company, that having at least two diverse board members have nearly 12% companies that have that have nearly 12% more earnings growth per year than the average company that lack diversity. 12% growth is significant, significant gains. Yes.

Brittany S. Hale: 10:04

Yes, I would never say no to a 12% increase in my business.

Karen McFarlane: 10:09

Right, exactly, that was back in 2020. So it's a little shocking, right, and outside of the earnings, which I know that's the most important thing, right, but outside of that, it just kind of shocks me that people today, people in any business, don't think that it's important to be reflective of the broader community. Right, women are half the population, right, at the very least. Why aren't there more women on boards?

Brittany S. Hale: 10:46

right.

Karen McFarlane: 10:47

At the very least. And then, of course, we add in the different. You know, I don't want to call us minorities, because we're becoming a majority.

Brittany S. Hale: 10:59

We'll come back to that in a moment. I have a very interesting stat for you.

Karen McFarlane: 11:05

Okay, good, all right, but why non-white groups are not part of the? Shouldn't be part of the equation? And so, just in general, from just an intellectual perspective, it just still boggles my mind. I know we've talked about this, but I just can't wrap my head around it.

Brittany S. Hale: 11:21

Yeah, and I have to say so. When I started in law school as you know, your law school summers are really important my first summer I started at a financial services firm and one of the things that I had to do was scour the Securities Exchange Act of 1934 and draft an insider trading primer for my supervisors. Oh, interesting. So this is very interesting to come at it from this perspective. And so at least the judges are saying that these rules don't further the Exchange Act, because the Exchange Act exists as a quote, primarily to protect investors and the macro economy from speculative, manipulative and fraudulent practices and to promote competition in the market for securities transactions.

Brittany S. Hale: 12:17

Mm-hmm, it is fascinating that they, knowing the data that you just shared, see this as an obstructionist take, when we know that this is going to promote competition in the market. Right, if we see that businesses are more successful. Um, I am trying to reason with that. And again, for people who I am assuming that these judges at least have a conservative slant, but again, conservatives are about limited government, ostensibly right, right, small government. And so this, uh, at least the, the judges who dissented and this is a nine eight opinion right, this was, it was not. It was very close, um, but they're saying that the court is overstepping its authority because nasdaq it's a limited liability, it's private, right Right, it is one thing if there is a public not appropriate for private organizations to how they choose to run their businesses and what they choose to require of the companies that interact with them.

Karen McFarlane: 14:28

I agree. That's totally another reason why it's shocking. And how will this have an effect on other things that companies require in going to be appealed and appealed and all that good stuff? But it's, it's. I feel like it's very short-sighted from that perspective because of the domino implications that this could have.

Karen McFarlane: 14:42

Right, and again, just unpacking that, that definition, that definition around competition and fraud. Of course it depends on every organization what those words mean. Banking, right, there could be fraudulent practices against the consumers that may disproportionately affect underrepresented groups. Right, and so, assuming none of that is intentional, right, when you have a diverse board, they can surface some of these things based on their experiences. And when you surface some of these things, sometimes it's not like this big aha.

Karen McFarlane: 15:34

Right, it is a small action that leads to another action that leads to another action. So it can go unnoticed for a very long time. But it's that one person that's like hey, you know what. This thing happens right in this community, or it happens to me, right, and it can have a negative effect that has larger implications for families, has larger implications for families. Maybe we should explore that from this business angle and see if there's something that we could change in our practices. That either doesn't cost us any money, or it's a minimal cost because investment in the community or the greater good, or it actually makes us more profitable by changing a couple steps in our process.

Brittany S. Hale: 16:32

Right.

Karen McFarlane: 16:33

And it's that thoughtful analysis that comes from people and people's experiences that can make your organization more consumer friendly in some cases, more consumer-friendly in some cases, and so obviously we weren't in the courthouse to hear these arguments, but from my layperson's perspective, I don't understand how something like this detracts from the definition of what NASAC and the SEC rules combine, what they're supposed to mean for organizations.

Brittany S. Hale: 17:18

Absolutely. Can I ask you some marketing questions? Yeah, how important is marketing and business growth?

Karen McFarlane: 17:32

I think it's the cornerstone of all business growth. That's you know, you know I you know from my perspective. You know, honestly, it's, at the end of the day, it's about the brand right and marketing is the is the steward of the brand right, and that brand incorporates messaging and how we go out to the world and how we relate to our customers or buyers, depending on B2B, b2c or whatever and it's your persona, it's how people perceive you. So, at the end of the day, I think that it is the primary function, although sometimes it's not seen that way.

Brittany S. Hale: 18:15

Okay, and is it beneficial to try to keep up to date with your target market in terms of demographics, consumer behavior, that type of stuff?

Karen McFarlane: 18:31

Absolutely your current and your target, the ones you have and the ones you want. So right, extremely imperative.

Brittany S. Hale: 18:40

So I know it seems like I'm cross-examining you a little bit. I'm coming with the leading question. Can you explain to those who may be listening and aren't aware? Can you explain what Nielsen's?

Karen McFarlane: 18:55

is oh, basically it's a measurement organization that really tests consumer interactions with you, right? So I think the most traditional form of that is with, say, television, right, who's watching, how long are they watching? And those data points are used to basically secure advertising, more advertising dollars, because if I can prove that 52 million people are watching this show, right, that has value to advertisers who want that reach. But it also is used across digital media as well.

Brittany S. Hale: 19:29

OK, are they? And I understand this may be kind of a biased question, but are they relatively relied upon, do they do? They have a pretty good reputation throughout the market.

Karen McFarlane: 19:45

I think they have an excellent reputation throughout the market. I think they have an excellent reputation throughout the market. I think it has changed over time, right Because of the nature of media, right? So, whereas in my view and also just as a caveat, I'm more B2B than B2C, which is where I see Nielsen mostly playing, but people can measure for themselves using different technologies and stuff and get a more accurate point of view I think Nielsen does now provide more in-depth and detailed data than they did, say, back in the day when you had to have top boxes and things like that. It's a different way to leverage them now.

Brittany S. Hale: 20:31

I ask because I attended a presentation led by an executive at Nielsen, which is unrelated, but what I saw was that minorities, or at least the global majority, account for 100% of US population growth since 2010. Damn, that shocked me. 54% of US population growth since 2010. Asians about 23%, Black Americans at 17% and non-Hispanic white population declined slightly from 2010 to about 2022. And then, of course, when it comes to people who identify as biracial or multiracial, about 42% of the you know part of the population growth that shocked me.

Karen McFarlane: 21:42

Wait, this is since when? Since 2020?

Brittany S. Hale: 21:46

Minorities account for 100% of US population growth since 2010.

Karen McFarlane: 21:53

2010. Okay, 2010. That is, those numbers are incredible. They're not necessarily shocking, and I'll just tell you this little story. Okay, how long ago was this? My son is 21. So, maybe 10 years. Yeah, maybe 10 years ago, something like that. Right, he was going to school and DEI, in a way I don't think it was really called that was starting to emerge right as a topic for the school, and they brought in some consultants to talk about this and how we could, you know, be more inclusive and things of that nature.

Karen McFarlane: 22:38

And I remember I was part of the Parents Association. I didn't see this, I didn't see the slides prior to the small group presentation. There's going to be a small group and then a larger group presentation, but I didn't see the slides. But one of the slides talked about the US population and the data showed something similar, not said exactly that way, but basically said you know, the world is browning, okay, and it will be brown all the way, brown by 2030. It was either 2030 or 2040, but I think it was something like that, okay, okay. And again, there's like 10, 12 years, something like that, and the school was majority white, you know, parents. And I remember saying to myself probably shouldn't have put that slide in, because the parents, the small group, that was in there lost their minds.

Karen McFarlane: 23:38

There was too shocking of a statistic for them to hear, cause it would be the first time that they were hearing it. Right, they weren't eased into the fact that their group okay was, you know becoming a minority essentially, and so it's not shocking to me, but I mean the shocking. It's not shocking because I knew it was coming for a very long time. To hear the numbers is like whoa okay.

Brittany S. Hale: 24:07

Exactly, exactly, and so I bring all of that up. I laid the foundation to share that stat, to reinforce that for these organizations you know that choose to be listed on NASDAQ and choose to interact with NASDAQ, nasdaq is seeking to reflect the changing of the tie, right, they're seeking to continue to be relevant and so doing, incentivizing businesses that also want to seek to continue to be relevant.

Karen McFarlane: 24:44

Agreed, it was a good and bold move for the times, yeah, but it's suffering at this point and so I think, kind of like we talked about, companies will have to reinvent how they approach this subject Right, because, like you said in the beginning, we wouldn't need this if people were just going to do it on their own without needing to be incentivized. I don't know if this is really an incentive.

Brittany S. Hale: 25:21

Yeah, it's more A mandate Exactly Implementing punitive right.

Karen McFarlane: 25:30

Right, and it's interesting why they even took that tact. I'm sure that there were conversations about this prior to, and it was determined that they had to mandate it in order to get people to comply. And it's interesting, they're only asking for two people. They didn't say 50% of your boards, right, they said two people, and one of which, again, is a woman, which should just be a given Correct. I don't know who the others can do for me, but I'm just saying like, well, damn, right, right. And so, really, at the end of the day, you're asking your bigger shift around race, which is a harder thing for people to do. Right is one person, right, because I don't understand why women are a problem. And look, you know, I don't know how the math works for this right, like if you had a Black woman, could you check your box? I don't know.

Brittany S. Hale: 26:36

Right, I was thinking you know a Black gay woman or a Black lesbian woman, right? Could she then Check, check, check?

Karen McFarlane: 26:46

I don't know how that works, but, hey, I'm sure they would have found some ways to work it out right In the explanation, the notes, but it's scary though it actually is scary to see something like this, and I'm really interested in how companies are going to approach it. Now, that's not saying that some companies weren't going to do this anyway. This is the mandate. They weren't even worried about it. This is part of our culture regardless, right from the top down. So I'm sure there's a good portion of companies where that is already part of their calculus and this is a non-factor. It's probably meant for the ones that are egregious historically and now there'll be no accountability towards it.

Karen McFarlane: 27:49

You know, and we as consumers just have to, I guess, just be aware it's really hard. You know, I get how it's really hard to follow these things because that's really on a macro level. Like you, consumers deal with stuff their day to day. Like you know, walmart, you know throwing out their DEI policies. You know there's large swaths of people that rely on Walmart's affordability for food and goods. Right, that can't just easily make the switch to Tarjay. So I get it and I think they know that right, there may be like a dip for a minute, but eventually people will swing back up right. I'm outraged right now from the fact that there's no ginger in ginger ale and there's some lawsuit with Canada Dry or something.

Brittany S. Hale: 28:53

I don't know if it's real, it's very upsetting to me as someone who loves ginger ale.

Karen McFarlane: 28:59

I love ginger ale right, this is my thing and I'm like it's only soda I drink, and so I was at the supermarket yesterday and I'm like, well, maybe I should just try ginger beer. There's a brand that my friend has. I need to find it. But I ended up buying ginger ale because I didn't see the brand that I was looking for.

Brittany S. Hale: 29:21

Now I'm very curious to know the brand. We can discuss offline, but I would love to know the brand, because there's one brand that is a cultural staple in the black American community, so anyway, um.

Karen McFarlane: 29:43

So anyway, just to say it's kind of hard to execute in terms of boycotts and things of that nature. It's hard to sustain that on a long-term basis, and I think the companies know that. And so we're in weird times, brittany. We're in weird times I mean I.

Brittany S. Hale: 30:04

I am more so concerned about our ability to compete and perform on a world stage because we're in a global market. Now I would even have we, you know our podcast, the. The country outside of the united states that listens most to us is Germany, so hello to people in Germany who are listening, followed by Canada and the UK and Sweden. So that for me is fascinating, it's exciting and at the same time, knowing that if our podcast is, you know, on a world stage, all of these other companies you know listed have to compete and perform globally. How are we, from a legislative and a judicial level, how are we hindering american progress, american success and american business performance on a global scale? And by american, of course, I mean the united states.

Karen McFarlane: 31:18

But I agree with you. I mean, look, just start inside your organization. If you're a global organization, you have employees everywhere and they're more than likely outside of the US, more diverse depending on where you are right and depending on your definition of diversity. But culturally, you have to be savvy to you know create a work environment where people are happy and are innovative and you know engaging with your customers in a meaningful way that's going to create loyalty and sustainability for your company. And so, again, it's just kind of shocking to think that there are organizations out there that don't think in that way. Like I need a board that's reflective of my global footprint, right, right, so I don't know, but what do I know?

Brittany S. Hale: 32:22

A whole lot, Karen A whole lot.

Karen McFarlane: 32:26

To me all right. And, by the way, I know stuff isn't easy, right, it's easy to talk about, it's very difficult to execute and there's so many different layers. On an organizational level. On a board level right, so many different layers, but it's not insurmountable. Board level, right, so many different layers, but it's not insurmountable. It just takes, you know, diligence and a strong desire to make it happen, right, and CEOs and boards are very smart people. They can get it done. They can get it done.

Karen McFarlane: 33:04

And if boards mandate it to their CEOs, if boards model the behavior in how they select their members, their board members, and they mandate it to their CEOs and they hold them accountable, then you have a really strong trickle-down effect, right? But if you don't, then you won a really strong trickle-down effect, right, but if you don't, then you won't Exactly. Well, I think we're going to be talking about this more, unfortunately, yes, and we'll continue to try to give you insights on how to navigate, on what you should and should not be doing, and I don't know. We'll just ride. We'll just ride this wave together, all we can do. I didn't see Mina today.

Brittany S. Hale: 33:58

She's here, she's napping, but she's got a little bit of bedhead lap head. I don't know Her eyes are wide open.

Karen McFarlane: 34:08

Yes, but her eyes are wide open. Yes, her eyes are wide open. So she says hello, you know, talk about the good stuff with mina yes, exactly all right. Well, we'll see you next time, britney, bye.