SEC Approves New Nasdaq Rules Promoting Board Diversity

Executive Summary

On August 6, 2021, the Securities and Exchange Commission (the "Commission") issued an order (the "Approval Order")¹ approving rules proposed by The Nasdaq Stock Market LLC ("Nasdaq"). New Rules 5605(f) and 5606 require a listed company to have at least two diverse board members or explain why it does not and to disclose board-level diversity data annually (the "Board Diversity Rule"). New Rule 5900-9 offers listed companies access to a complimentary board recruiting service (the "Board Recruiting Service Rule").  The new rules respond to investors' increasing demand for diverse boards and diversity-related information about public companies.

The Board Diversity Rule