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ARTICLE · 19 AUGUST 2021

Nasdaq's New Board Diversity Rule

A&O Shearman
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On August 6, 2021, the Securities and Exchange Commission approved the Nasdaq Stock Market's proposed listing rule related to board diversity.

United StatesCorporate/Commercial Law
Richard Alsop
Richard Alsop
John Cannon, III
John Cannon, III
Doreen Lilienfeld
Doreen Lilienfeld
Lona Nallengara
Lona Nallengara
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On August 6, 2021, the Securities and Exchange Commission (the "SEC") approved the Nasdaq Stock Market's ("Nasdaq") proposed listing rule related to board diversity (the "Board Diversity Rule").

The purpose of the Board Diversity Rule is two-fold to: (1) promote greater diversity among the membership of the boards of directors of Nasdaq-listed companies and (2) provide stakeholders with consistent board diversity disclosure. According to Nasdaq, the Board Diversity Rule is "not a mandate and does not set a hard target that companies must adhere to regardless of their circumstances."1

Certain aspects of the Board Diversity Rule are effective as early as next August, and other aspects do not become effective until 2026, with the timeframes to satisfy the minimum diversity representation requirements based on a company's Nasdaq listing tier.

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