SEC Approves New Nasdaq Board Diversity Requirements

On August 6, 2021, the Securities and Exchange Commission (SEC) approved a Nasdaq proposal to amend its listing rules intended to increase diversity on corporate boards of directors. Under the approved new rules, Nasdaq-listed companies must publicly disclose information related to the voluntary, self-identified gender and racial characteristics and LGBTQ+ status for members of their boards of directors. Additionally, each listed company would be required, subject to certain exceptions (including for newly listed or smaller companies), "to have, or explain why it does not have, at least two members of its board of directors who are Diverse, including at least one director who self-identifies as female and at least one director who self-identifies as an Underrepresented Minority or LGBTQ+." In 2020, Nasdaq estimated that more than 75% of its listed companies would not have satisfied the new listing requirements.