The proposal encourages board diversity for companies listed on the exchange and provides stakeholders with consistent, comparable disclosures concerning board composition.
By Paul Davies, Paul Dudek, Colleen Smith, Andra Troy, and James Bee
On August 6, 2021, the US Securities and Exchange Commission (SEC) voted to approve Nasdaq’s proposed changes to its listing rules (the Board Diversity Objective), which seek to encourage board diversity for companies listed on the exchange and provide stakeholders with consistent, comparable disclosures concerning a company’s board composition.
The Board Diversity Objective requires companies listed on Nasdaq to:
- Publicly disclose board-level diversity statistics using a standardized template
- Have, or explain why they do not have, at least two “diverse” directors, including at least one director who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+[1]