by Brian V. Breheny, Raquel Fox, Marc S. Gerber, Andrew J. Brady, Caroline S. Kim, Ryan J. Adams, Andrew T. Bond, Leo W. Chomiak, Jeongu Gim, Blake M. Grady, and Khadija Lalani
On August 6, 2021, the Securities and Exchange Commission (SEC) approved[1] the Nasdaq Stock Market’s (Nasdaq) proposal to amend its listing standards to encourage greater board diversity and to require board diversity disclosures for Nasdaq-listed companies. Subject to transition periods and limited exceptions, Nasdaq-listed companies will be required to (i) publicly disclose board-level diversity statistics on an annual basis using a standardized matrix template under Nasdaq Rule 5606 and (ii) have, or disclose why they do not have, a minimum of two diverse board members under Nasdaq Rule 5605(f).[2] The mandatory “board diversity matrix” disclosure and the “comply or explain” board diversity framework are described in greater detail below. This post reflects updates from Nasdaq guidance issued August 13, 2021.