Last month, a California lower court struck down a state law requiring gender diversity on public company boards. Weeks earlier, a California law mandating the inclusion of directors from underrepresented groups also fell to a California state court ruling. The news drew national attention as the importance of board diversity has become widely understood. To many, these laws were considered an important early step.

In truth, the progress our public companies have made toward greater board diversity owes as much to market forces as rules-based mandates.

The New York Stock Exchange has been a strong proponent of diversity on boards for some time. In 2019, the NYSE Board Advisory Council launched an initiative to identify board-ready candidates from underrepresented groups. This solutions-based approach is a resource to help public and private companies meet their market-driven needs.

Leading up to the council’s founding three years ago, institutional investors already were pushing companies on their ESG initiatives, including board diversity. During 2017’s proxy season, for example, State Street Global Advisors voted against more than 500 companies that had failed to take action on gender diversity for their boards. That same year, State Street introduced Fearless Girl, who stands proudly outside the NYSE today as a symbol of the company’s commitment to diversity.

Other investors such as BlackRock and Goldman Sachs Asset Management have also launched their own board diversity initiatives. Indeed, many institutions today have board-diversity requirements for the companies in which they invest. Younger investors in particular factor ESG into their investing decisions.

The NYSE’s approach to helping our more than 2,400 listed companies, as well as many private companies, make progress on board diversity centers on the NYSE Board Advisory Council, comprised of the CEOs of some of the world’s largest and most well-established companies including Delta Air Lines, Goldman Sachs, HP, Procter & Gamble and The New York Times Company. These CEOs participate by leveraging their own personal and professional networks to identify and recommend talented, diverse, board-ready candidates. Last year, for example, Dow elected a candidate identified through the council, AT&T controller Debbie Dial, to its board.

In addition to educational and networking opportunities for the board candidates, the council hosts a series of live events designed to connect diverse candidates to NYSE-listed companies seeking to diversify their boards. The highlight of the series is an annual networking summit, slated to take place this year on September 20. The council’s efforts have already yielded more than 500 meetings between board leaders and diverse candidates since its inception. Our candidate pool has grown to nearly 300, and more than 30 of our candidates have joined boards.

“The networking was top notch,” Dial told the NYSE’s Floor Talk video series, recalling a council event that matched candidates with board members and nominating and governance committee chairs from NYSE-listed companies.

As an exchange operator with an abiding belief in the power of free markets, the NYSE is quite proud of our market-driven approach to board diversity. While we still have a long way to go, it’s worth noting that substantial progress has been made. Of the NYSE-listed companies in the Russell 1000, nearly 100 percent have at least one female director on their boards, according to research by NYSE parent Intercontinental Exchange. Ninety-five percent have at least two or more female directors, and 88 percent have at least 20 percent female representation. Indeed, our own ICE board is 60 percent women.

Why work so hard for board diversity? We believe categorically that diversity of thought and experience is an invaluable asset for problem-solving, innovation and creativity. If the leading companies of today plan to be the leading companies of tomorrow, they will need diversity at the very top.

Elizabeth King is President of ICE ESG and Chief Regulatory Officer at Intercontinental Exchange, the NYSE’s parent company, and oversees the NYSE Board Advisory Council.