On December 1, 2020, the Nasdaq Stock Market LLC filed with the US Securities and Exchange Commission (SEC) a proposal for new listing rules related to board diversity and disclosure, which are intended to advance board diversity and enhance the transparency and comparability of diversity statistics. The new rules would require Nasdaq-listed companies:

  • to have, or to explain why they do not have, at least two diverse directors, including (1) at least one director who self-identifies as female (regardless of assignment at birth) and (2) at least one director who self-identifies as either an underrepresented minority or as LGBTQ+, and
  • to provide a standardized board diversity matrix to disclose directors’ self-identified gender, race and ethnicity, and LGBTQ+ status.

Foreign issuers (including foreign private issuers) and smaller reporting companies would be able to satisfy the board-composition requirement by having two directors who self-identify as female.

Disclosure of diversity statistics would be required within one year of SEC approval of the proposed rule.  Companies would be required to have, or to explain why they do not have, (1) one diverse director within two years of SEC approval and (2) two diverse directors within four years of SEC approval (or five years, for Nasdaq Capital Market tier companies).

See the full text of the Nasdaq proposal here.