Nasdaq Announces Rule Request To Improve Board Diversity

Nasdaq recently filed a proposal with the U.S. Securities and Exchange Commission ("SEC"), seeking approval of a rule requiring Nasdaq-listed companies to appoint diverse directors and make certain specific disclosures about their board diversity. Specifically, Nasdaq proposed the following new rules: (i) Rule 5605(f) (Diverse Board Representation) and (ii) Rule 5606 (Board Diversity Disclosure), as well as (iii) certain conforming changes to rules that are implicated by the proposals. If approved, the new rules would affect each of the more than 3,300 Nasdaq-listed companies and perhaps lead to other exchanges following suit.

In the 271-page Notice of Rule Proposal, Nasdaq provides a comprehensive review and analysis of the currents status of board diversity, applicable rules and policies, implications of board diversity and the available studies. Based on its research, Nasdaq concludes the proposed rules are necessary to bring much needed transparency and