SEC Approves Nasdaq Proposals Supporting Board Diversity

The SEC approved two Nasdaq Stock Market LLC ("Nasdaq") rule proposals on board diversity: one requiring disclosure of diversity statistics ("Board Diversity Proposal") and one offering free access to a board recruiting service ("Board Recruiting Service Proposal"). The proposals are intended to promote diversity among the boards of Nasdaq-listed companies, and to increase transparency and accountability.

The Board Diversity Proposal requires that Nasdaq-listed companies (i) have at least one director who self-identifies as a female and at least one director who self-identifies as an underrepresented minority or LGBTQ+ or (ii) explain why the company cannot meet such a requirement (or have one Diverse director for a company with a Smaller Board; see previous coverage here). Foreign issuers will be permitted to satisfy the standard by having two women directors or by demonstrating that its second director is an underrepresented minority in the country in which the