Nasdaq Diversity Rules Struck Down

On December 11, 2024, in a 9–8 decision, the US Court of Appeals for the Fifth Circuit struck down the Nasdaq Stock Market's board diversity rules, holding that the Securities and Exchange Commission (SEC or Commission) exceeded its statutory authority when it approved them. As a result of the ruling, Nasdaq-listed companies no longer need to comply with Nasdaq's board diversity requirements.

Adopted in 2022, the board diversity rules required Nasdaq-listed companies to disclose board diversity data in a standardized board diversity matrix. The rules required that Nasdaq-listed companies either (i) had to have at least one female director and at least one director who self-identified as an underrepresented minority or LGBTQ+, or (ii) had to explain why they did not have the requisite number of diverse directors on the board. The rules required companies to disclose director diversity information in the board diversity matrix annually in the company's proxy