DIR's Supplier Diversity Information Resource Guide 20, Jan 2012 | Page 106

COPYRIGHT
Domestic Certifying Organizations 2012, DIVERSITY INFORMATION RESOURCES, MINNEAPOLIS, MN

group members. "Minority group members" are United States citizens who are African-American, HispanicAmerican, Native American, Asian-Pacific American and Asian-Indian American. Ownership by minority
individuals means the business is at least 51% owned by such individuals. Further, the management and
daily operations are controlled by those minority group members. This will not change.
2. This initiative affects only those NMSDC-certified firms that have an opportunity to accept equity
capital from professional institutional investors, through the creation of a new class of non-voting stock.
3. Any exceptions to the 51% ownership policy would be made on a case-by-case basis; MBEs approved
for this special certification will be tracked separately.
4. In these cases, a minority business may be certified as a minority business enterprise (MBE) if the
minority owners own at least 30% of the economic equity* of the firm. This occurs when non-minority
.
on
investors contribute a majority of the firm’s risk capital (equity). Under this special circumstance, a business
ati
rm
o
inf
may be certified as a minority firm if the following criteria are met:
ore
m
a. Minority management/owners control the day-to-day operations of the firm.
for
b. Minority management/owners retain a majority (no less than 51%) of the firm's "voting equity." s.com
e
c. Minority owner/s operationally control the board of directors (i.e., must appoint a majority sourthe
of c
e
oR
board of directors).
Inf
ty
rsi

ve
Di

5. In order to become certified as an MBE under the framework outlined in Sectiono@ above, the MBE’s
4
Inf
ct certifying committee.
non-minority investor must be a “professional institutional investor” approved byntthe
a
co
We define the term professional institutional investor to mean a firm that (a) is ein the business of making
s
lea
equity investments (not managing businesses), and (b) manages more than. P
N $25 million in capital.
lis

po
ea

,M

6. Given the complexity of the issues involved and the needinn consistency in certification decisions,
for
,M
the National Minority Supplier Development Council (NMSDC)esemploys a national, rather than regional,
urc
certification committee for these purposes. Firms will beeso
R certified by a committee at the national level, in
n
conjunction with members of the National Associationo of Investment Companies (NAIC), an industry associaati
rm
o
tion for investment companies that dedicate financial resources to investing in the ethnically diverse marInf
ty
rsi
ketplace.
ve
Di
r