Cisco Beats Board Diversity Shareholder Derivative Suit, for Now

Cisco Systems Inc. is free for now of allegations its leadership made misleading statements about its commitment to corporate diversity, but a federal judge in California gave shareholders permission to fix up their complaint and try again.

The San Jose-based networking giant’s shareholders didn’t adequately plead that the Cisco board of directors “wrongly refused” their pre-suit demand that the company add Black directors to live up to its public statements on diversity, the U.S. District Court for the Northern District of California said.

The shareholder derivative complaint—filed in September 2020, seven weeks after the pension fund behind the suit ...