by Edward D. Herlihy and David K. Lam 

On December 1, 2020, The Nasdaq Stock Market LLC (“Nasdaq”) submitted a proposal (PDF: 1.51 MB) to the SEC to adopt listing rules related to board diversity. There appears to be some confusion in the news media about the concept. The proposed rule does not impose a hard mandate or quota system, as some of its critics have suggested. Instead, the Nasdaq proposal is a disclosure-based rule that offers companies flexibility to maintain their decision-making authority over the board’s composition.
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