SEC's Approval Inches NASDAQ Closer To Implementing Board Diversity Listing Requirements

Late last year, Nasdaq submitted for approval to the Securities and Exchange Commission the proposed listing Rule 5605(f) and Rule 5606 requiring all, with a few exceptions, of Nasdaq's roughly 3,249 listed companies to have at least two diverse board members or otherwise explain their reason for not doing so. The rule also would require disclosure of the diversity of their boards on an annual basis. Following slight changes to the language and discussions with a broad spectrum of market participants and stakeholders, on August 6, 2021, the SEC issued its approval of these rules, concluding it would promote transparency, consistency and comparability of listed companies' board diversity.