The primary challenge facing the Securities and Exchange Commission as it once again tackles the issue of board diversity is defining what “diversity” actually means, corporate governance experts told Bloomberg BNA.

The commission must consider the “multiple dimensions of diversity,” said Stanford law professor and former SEC member Joseph Grundfest. Beyond gender, there are numerous ways to classify ethnic diversity, “and the classification challenges in this space are legendary,” he told Bloomberg BNA in an e-mail.

…

The primary challenge facing the Securities and Exchange Commission as it once again tackles the issue of board diversity is defining what “diversity” actually means, corporate governance experts told Bloomberg BNA.

The commission must consider the “multiple dimensions of diversity,” said Stanford law professor and former SEC member Joseph Grundfest. Beyond gender, there are numerous ways to classify ethnic diversity, “and the classification challenges in this space are legendary,” he told Bloomberg BNA in an e-mail.

Will the agency, for example, define who is African-American or will it leave it to directors to self-identify, or will the agency require that the corporation classify each director’s ethnicity? Grundfest asked. In addition, how will the agency approach disclosures when directors prefer not to be classified or when they can claim multiple heritages?

“Some diversity advocates are also calling for greater representation of the LGBT community in the boardroom,” he added. “Will the agency call for disclosure of sexual preference as part of this initiative?”

The commission further must think carefully about the objectives it is seeking to achieve through its disclosure regime, and how those objectives are rationally related to the agency’s mission, Grundfest said.