Vote on Minority Designation Delayed

A vote on whether to give big investor-driven companies benefits traditionally reserved for small minority-owned firms has been postponed for 90 days in the wake of fierce protest by minority business advocates.

The corporate board of the National Minority Supplier Development Council had been scheduled to vote Tuesday in Phoenix on a proposal to allow minority-controlled companies to receive minority designation, even if they are 70% owned by institutional investors. Current rules require 51% minority ownership to receive minority certification.

The council certifies minority-owned companies for private sector corporations. The proposal aims to encourage minority-owned companies to grow and compete for bigger contracts by allowing them to receive equity capital without losing their minority status.

Word of the proposed change sparked protests by minority business organizations--and some corporations--who argue that small minority companies will suffer if big corporations are allowed to count contracts with investor-driven minority firms toward minority goals

About a dozen minority organizations--accompanied by representatives of corporations--held news conferences Monday and Tuesday to oppose the vote and threaten ramifications against firms that voted yes.

“They faced continued criticism from the minority business associations,” said Robert Gnaizda, public policy director of the San Francisco-based Greenlining Coalition, a minority business advocacy group that has opposed the change.

“The purpose of the delay is solely to clarify understanding of this important proposal for our corporate membership and for our [minority business enterprises],” Harriet R. Michel, president of the council, said in a statement.