SEC Approves Nasdaq Rule Changes Aimed At Expanding Boardroom Diversity

As we have discussed in prior alerts (here and here), expanding boardroom diversity has been a recent focus for many regulators, issuers, shareholders and other stakeholders. To this end, in December 2020, Nasdaq Inc. proposed new rules that would require the companies listed on its stock exchange either (i) to include on their boards at least one woman, as well as at least one individual who identifies as a racial minority or as LGBTQ+, or (ii) if they fail to meet these standards, to file a written explanation for why they are not meeting Nasdaq's diversity targets. The proposed rule changes would also require disclosure of board-level diversity statistics using a standardized template. According to a review conducted by Nasdaq, more than three-quarters of Nasdaq-listed companies failed to meet the proposed requirements as of late 2020.