Nasdaq Amends Board Diversity Proposal—SEC Extends Deadline And Solicits Additional Comments

On February 26, 2021, in response to more than 200 comment letters received from Nasdaq-listed issuers, institutional investors, asset managers, legislators, advocacy organizations, law firms, individual board members and other citizens, Nasdaq filed Amendment No. 1 to its initial proposed rule change regarding board diversity disclosures (Original Proposal).

Nearly 85% of substantive comment letters received were in favor of the Original Proposal. The Amendment is intended to strengthen the Original Proposal and provides additional flexibility, grace periods and longer phase-in periods for newly listed companies to comply with its diversity objectives. Nasdaq's response letter to the SEC outlining the Amendment also addresses "common misperceptions" about the Original Proposal, including clarifying that it does not impose quotas (failing to meet objectives triggers a disclosure requirement, not a penalty) and that companies do not risk delisting if they do not meet